Signs of a Resurrection

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By Warren Brown
Sunday, March 15, 2009

I am looking for light at the end of a long and exceptionally dark tunnel. Finding it isn't easy, as indicated by last month's 41.4 percent drop in U.S.-market new-vehicle sales. That was the lowest February posting since 1976, when the automobile industry began reporting monthly sales numbers in the United States.

But I am a perennial, or, perhaps, a pathological optimist. Blame or credit my years of theological training in Catholic schools. I am the product of scholars, some of whom remain with us, who believe that faith grows stronger as we approach the gallows.

In which case, industry leaders reading this column should beware. As I've written in this space several times, many of you will survive -- but only after much pain and suffering. You will be smaller. Many of your dealers will die. There will be multiple traumatic shakeups, possibly including staff layoffs at the venerable National Automobile Dealers Association in McLean.

But, as there is spring in the meteorological calendar and Easter in the Gregorian accounting of time -- a rebirth in one instance and a resurrection in the other -- good times will return to the automobile industry.

There are signs. But you must know where to look and how to divine them when found.

For those of us schooled in the notion that death begets life, attention should be turned to the nation's aging vehicle fleet and to the rate -- the "scrappage rate" in industry parlance -- at which those cars and trucks are rolling to the grave.

According to numbers compiled by the market research firm R.L Polk and by the Automotive News Data Center, the median age of passenger cars on U.S. roads reached a record 9.4 years in 2008, surpassing the 2006 median age of cars of 9.2 years, the previous record high.

The comparable on-the-road age for light trucks (pickups, vans and sport-utility models) was a record 7.5 years in 2008, beating a light-truck record of 7.1 years in 2007.

Better product quality for both domestic and foreign models, as indicated by R.L. Polk and other industry surveys, is one of the big reasons cars and trucks are enjoying longer useful lives. Of course, a dismal economy, made more horrible by frozen consumer credit, is keeping older models in service.

But therein are two reasons for faith.

The first is that aging cars and trucks require service. Well-staffed, well-stocked auto dealership repair shops, especially those willing to bargain with hard-strapped consumers on needed repairs, tend to be those that stay in business. That, at least, seems to be the case for two local dealerships groups, Darcars and Fitzgerald Automotive.

Executives at both companies report taking a hit on new-vehicle sales -- no news there. But they say they are holding onto customers in the repair bays.


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