Predicting an Unprecedented 65% Drop In Total Vehicle Miles Traveled in U.S.
Predicting an Unprecedented 65% Drop In Total Vehicle Miles Traveled in U.S. for March 2020 – How Automotive Services Are Impacted
As the COVID-19 pandemic hit U.S. soil early this year and as states went into shelter-in-place, many businesses implemented a work-from-home policy. Non-essential travel was discouraged by local towns, cities, and states. Additionally, the pandemic caused businesses to cut workforces and triggered a massive number of people filing for unemployment benefits. All of the aforementioned events translated to less frequent use of motor vehicles. Cars, trucks, minivans, SUVs and other motor vehicles sat unused in garages, driveways and on streets; only to be in motion for essential travel. Traffic on freeways and highways all but vanished and local neighborhood streets were vacant of four-wheel traffic.
Based on data from the U.S. Department of Transportation (DOT) and studies conducted by Openbay, total Vehicle Miles Traveled (VMT) through the month of February 2020 had declined from the end of January 2020. This decline is seasonal and was expected based on past trends. According to the DOT, total VMT in the U.S. for February was 231,664 million miles versus 253,656 million miles for January, an 8.6% decrease in total VMT. Going back over two decades, the month of February has the lowest total VMT when compared to other calendar-year months, averaging a 6.3% decline in total VMT when compared to the prior month of the same year. The month of July historically has the highest total VMT when compared to any other month during a calendar year. This is most likely due to families traveling by motor vehicle for summer vacations.
Although the DOT has yet to release their finding for total VMT in the U.S. through the end of March 2020, Openbay is forecasting 96,648 million vehicle miles traveled in the U.S., a 58% decline from the end of February 2020. This will be the largest decline in a given month for total VMT in more than two decades. What is alarming is that the expected total VMT for the month of March historically increases by an average of 19% (prior 5-year average) from the total VMT in February. This unexpected drop in VMT is projected to cause a 65% decline in the expected total VMT for the month of March 2020. This drop in total VMT will have a profound impact on many sectors of the automotive industry to include the automotive aftermarket.
Total VMT Has a Direct Impact on Demand for Automotive Service
With fewer vehicle miles traveled, demand for automotive service has significantly declined in certain parts of the United States. Consumer-owned vehicles and business fleets in need of service are postponing their service until the need to get back on the road increases. It’s a known fact: the more miles a vehicle travels, the higher the cost of operation. These costs include fuel, general maintenance, and repairs. Depending upon the type of service being performed on a vehicle and its model year, general maintenance and repair costs can vary.
Expect A Change in How Consumers Shop For Service – “Digital First”
Shelter-in-place forced consumers to change their shopping behavior when it came time to acquiring products and services. Simply put, they went online first. They performed searches, did their research, and then selected a vendor or professional to deliver that product or service. This includes automotive services. Consumers now have the ‘digital first’ mindset.
For automotive service businesses, it’s more important than ever to adapt new technologies to accommodate the needs of the digital-first consumer. Openbay shared information for automotive service businesses on how to address this challenge.
When demand for automotive services increases over the coming months – and it will – Openbay is here to help. Openbay is building the world’s most trusted and transparent automotive services marketplace helping vehicle owners reduce vehicle operating costs and helping automotive service centers improve the way they acquire vehicles to service.
Membership for the Openbay marketplace for consumers and automotive service centers is free.
Automotive service centers can apply to become a member here.
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