High-quality used cars flood marketplace
|Most cars sold in Canada are used: While new-car sales were up some 6.6% over last year to 1.557 million, that's still far short of 2003's peak of 1.703 million. Used cars, on the other hand, have never been more popular. The 2.89 million "previously loved" jalopies sold in 2010 was an-all time high.|
The good news, if one listens to Dennis DesRosiers (and I do since he's Canada's leading auto analyst), is that 20% of Canadians are always in the market for a new set of wheels. That's right: At any given time, one in five Canadian car owners is shopping for a replacement ride.
You'll notice I specifically did not say new cars. Indeed, I most definitely did not mean new since, as DesRosiers points out, of the 4.44 million automobiles that changed hands in Canada in 2010, the great preponderance were in fact pre-owned. Yup, most cars sold in Canada are used. While new-car sales were up some 6.6% over last year to 1.557 million, that's still far short of 2003's peak of 1.703 million. Used cars, on the other hand, have never been more popular. The 2.89 million "previously loved" jalopies sold in 2010 was an-all time high.
In case you don't have your handy-dandy calculator at the ready, that represents almost two-thirds of the cars sold in Canada, up from about 56% just a decade ago. One could, of course, blame the shift on our recently flat economy, but, as DesRosiers points out, the trend was on the upswing long before the North American economy took its swan dive off Wall Street's ivory tower.
Instead, DesRosiers credits the incredible reliability of the modern automobile for "the high quality of used product in the market." With OEM devotion to new-car quality growing by leaps and bounds, no longer is purchasing used a euphemism for buying someone else's problems.
The durability numbers bear out DesRosiers' research. According to R.L Polk Data, for instance, 54.2% of all the cars manufactured in the last 25 years are zooming around our roads today. Oh, sure, the statistics drop off radically for the last five years of the study with only less than 10% of 25-year-old clunkers still driveable, but, on the other hand, more than 80% of all 15-year-old Hondas, Toyotas and Subarus are still commuting to this day.
Such longevity ? long the mantra of consumer advocacy groups ? may yet prove a thorn in the side of government agencies trying to regulate emissions and fuel economy. With older cars now so reliable, there's far less incentive to scrap an older car in favour of a "cleaner," more fuel-efficient version. And, if regulation-induced "improvements" jack up the price of showroom-new automobiles, then there's always a perfectly serviceable used car ? albeit one that consumes more fuel and spews far more fumes than any 2011 product ? available at a fraction of the cost.
Should, for instance, the American government's proposed 62-miles-per-gallon fleet average (for 2025) emasculate our modern automobile, there'll be even less of a reason to buy new. With "previously loved" automobiles so fundamentally sound, there's also no reason older vehicles couldn't be refurbished and rebuilt, allowing consumers to simply eschew the entire diesel/electric/two-cylinder-hybrid thing in favour of their beloved sports cars, SUVs and pickups. The truck segment would seem to be particularly susceptible to such rebellion. For one thing, trucks last even longer than cars. Those amazing durability statistics for passenger cars I noted earlier? Well, they're dwarfed by the truck numbers, which see an incredible 17.9% (almost three times the rate for cars) of the light trucks manufactured in the last two-and- a-half decades still on the road. For instance, 21.7% of all the Chevrolet pickups sold 25 years ago are still being driven. Considering how many Sierras and Silverados ? not to mention Tahoes and Suburbans ? The General has sold since 1985, that's a whole bunch of old gas guzzlers still on our roads.
And their owners are, by very definition, the most hide-bound of automotive consumers. So, while I think Ford's experiment with substituting a turbocharged 3.5-litre EcoBoost V6 for the F-150's traditional V8 may gain some traction, the chances some more radical, more fuel-efficient technology ? say, a tiny four-banger with some of that infernal hybrid business ? might actually catch on with full-sized pickup owners is yet another Obama-Yes-We-Can too far. Indeed, one anonymous auto executive recently told me his company had anticipated just such resistance and was investigating setting up a wholesale rebuilding operation that would refurbish older-style (that would read V8-powered) trucks and large SUVs for those not wanting to purchase a new Obama-mobile.
Of course, governments could pass stringent legislation requiring the scrappage of older vehicles, but that would require a political suggestion as yet unseen, just as there's been no serious discussion of raising gasoline taxes to encourage consumers into smaller, less wasteful cars. Instead, we're stuck with the cockamamie idea of forcing manufacturers to build hyper-efficient automobiles for which there is yet to be proven a willing consuming public.