The new crown epidemic has severely impacted US car sales.
Compared with 2019, new car sales in the United States are expected to drop by at least 15% this year. This is the fourth largest annual decline in US sales since 1980.
Car dealers in Jersey City, New Jersey show cars to customers
However, experts say that if it were not for the greater flexibility of retail customers, 2020 might be much worse for the industry than it is now.
In any normal year, such a rapid decline means that the entire industry is in crisis. But in 2020, most people feel a little better than they thought.
“This has been a difficult year, but I think this ending is much better than we expected.” said Nick Woolard, director of automaker analysis at TrueCar, an American auto trading platform.
People were caught off guard by the sudden turn of events. The entire industry has plunged into a very dark day and is ready to do so throughout the year.”
At the peak of the first outbreak of the new crown virus this spring, auto factories stopped production, many dealers were forced to close their showrooms, and new car sales almost collapsed. J.D. Power predicts that retail sales in April will drop by as much as 80%, leading to this year’s sales level may fall to the bottom.
But the rebound in consumer-oriented retail sales has far exceeded anyone’s prediction.
Sales in the second quarter fell by about 34%, but with low interest rates (even zero interest rates), long-term auto finance offers, the exclusion of public transportation, and the suspension of flights, this part of sales was greatly pulled back.
“One of the biggest good news in 2020 is undoubtedly the recovery of retail car sales, which is almost back to the pre-epidemic level.” Jessica Caldwell, Executive Director of Insights at Edmunds, a car sales and car information service website ( Jessica Caldwell) said.
Edmunds predicts that final statistics will be released around January 10, 2021, and that new car sales this year will fall by 15.5%, which is in line with other industry estimates.
It is estimated that the new car sales in 2020 will be approximately 14.4 million to 14.6 million, which is lower than the 17 million in 2019, and sales in 2019 are already the lowest in the past five years.
Cox Automotive, a service provider of digital marketing, software and e-commerce solutions, predicts a decline of 15.3%, while TrueCar expects a 15% decrease in sales compared to 2019.
TrueCar reports that compared with 2019, retail sales are expected to fall by only 8%, while fleet sales for commercial and government customers are expected to plummet by 43%.
If the prediction is correct, 2020 will be the fourth largest annual decline in the US auto industry since 1980, with the first three being 19.1% in 1980 and 18% and 21.2% during the Great Depression in 2008 and 2009.
“This year has brought incredible challenges to the economy and the automotive market.
When we ended the year, we saw how outstanding the performance of the entire automotive industry was.” Cox Automotive Chief Economist Jonathan Smoke said.
Due to plant shutdowns in the spring, inventory levels are tight, and fleet sales decline and retail sales gradually increase have also led to better-than-expected profits for automakers.
Many listed dealer groups have even set new records in profits.
AutoNation, the largest distributor group in the United States, had quarterly adjusted earnings per share of US$2.38 in the third quarter, an increase of 102% compared to last year and a record high.
This was due to a slight decline in quarterly revenue, but operating income still increased by 40%.
“This is the absolute best quarter in our history.”
AutoNation CEO Mike Jackson told CNBC (National Broadcasting Corporation Finance Channel) in October, “The demand for personal mobility has reached its peak.
I think the emergence of this epidemic has been It has changed the psychology of Americans. It is difficult to predict the situation in five years, but the demand has changed in the next three to five years.”
Other listed dealer groups, such as Group 1 Automotive, Lithia Motors and Sonic Automotive, also set records this year.
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