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Monthly U.S. new vehicle sales and registration results are followed closely, but by so doing sometimes we lose sight of significant long-term trends. For example, a review of state-level new vehicle registrations clearly shows that the new vehicle buying population is shifting from the Northeast and Midwest towards the South, Southwest and West (see map below). The ten states whose shares of total U.S. new vehicle registrations have increased the most over the past five years are all in the South, Southwest or West. The two biggest states in this part of the country, California and Texas, have experienced the greatest gains in share of U.S. registrations, up 1.29 percentage points (pp) and 1.31 pp, respectively. At the other end of the scale, the three states that have seen the greatest declines in share are all located in the Northeast (New Jersey, New York and Pennsylvania).
This geographical shift in total new vehicle registrations has several implications, including:

  • New vehicle registrations in colder and four-season climates are declining, which has implications for vehicle content and drivetrain mix
  • The move away from higher density areas such as New York and Philadelphia would seem to favor larger vehicles including light trucks at the expense of smaller vehicles more appropriate for urban areas; this trend would seem to be in sync with the growing appeal of urban mobility ventures such as Zip Car and others that to do not require vehicle ownership
  • The shift towards the South and Southwest would seem to work in favor of brands that resonate with several ethnicities, including Hispanics; in New Mexico, California and Texas, Hispanics comprised 27%, 19% and 18%, respectively, of all new vehicle buyers in 2014 versus 8% nationally
  • OEMs will want to build and maintain retail distribution networks in line with this registration shift, including greater representation in the South, Southwest and West
  • There are also implications for the aftermarket providers, as they will need to have appropriate retail representation in the growth states
  • Those manufacturers devoted to electric vehicles will need to focus on building infrastructures in line with these registration shifts

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