2020 Automotive Industry sales haven’t panned out like many “experts” believed it would at the beginning of the year. Many experts predicted a record-breaking year in both manufacturer quantities and dealership sales.
But when the COVID-19 pandemic began in March, no one was prepared for the worst quarter in sales since the 2007-2009 Great Recession. Then, to everyone’s surprise, dealerships all over the country were shattering sales records in the third quarter.
It’s true this year has been a rollercoaster. But in the last few months, the automotive market has finally started to normalize. And while nothing’s set in stone, here are some trends you can expect from Q4 automotive sales.
Continued Public Transportation Shortages
More and more commuters are turning towards used cars in the wake of unreliable, shutdown or perceived unsafe public transportation options.
Many U.S. cities are still experiencing a shortage of bus and train operators due to either fear of illness or illness itself. Additionally, many travelers are avoiding public transportation all together out of fear of getting sick. And it’s understandable, with tight quarters and little to no sanitation, public transportation is perceived by many to be a hotbed for disease.
It could be years before consumers feel comfortable taking regular public transportation again. This means many Americans are entering the car-buying market where they might not have before. And many of them are in the purchasing process right now.
Used Cars Still In High Demand
The demand for quality used cars is still higher than ever. Like we said before, a lot of new customers are entering the market due to a lack of public transportation in addition to the high volume of customers who were already in the market for used vehicles.
And with money tight for a lot of families, people aren’t looking to purchase fully updated new cars. They’re looking for affordable used options that don’t break the bank. This high demand for used vehicles has and will continue to make it difficult for dealerships to keep their lots stocked. If you need information on how to sell cars when inventory’s tight, then you need our free eBook How To Sell More Cars When You’re Short On Inventory.
Higher Selling Price Per Used Car
As frustrating as finding and securing used cars has been for many dealers, one benefit to the shortage is a subsequent higher selling value. Sure, it may cost more at auction, but recently, these cars have been worth more in resale value.
With the high demand comes greater product value and not only will it be easy to get customers in the door, in a lot of cases you won’t need to fight every nickel and dime with them to close the sale.
But while this sounds great, it won’t last forever. Just because customers are knocking down your door right now doesn’t mean they always will. Whether you’re busy or not, you should always have a plan in place to attract and sell customers.
Manufacturers Are Still Struggling To Produce
Due in large part to growing safety concerns, many manufacturers are open, but under highly modified production conditions. These modifications often include additional sanitation procedures and reduced staff, which significantly slows down production capabilities.
Recently, General Motors developed new technology to aid in workplace safety and has shared this information with other manufactures. But this is a slow-moving process, and it could be at least a year before manufacturers are back to producing enough products to keep up with demand.
Second Stimulus Check
There’s no telling whether Americans will receive a second round of stimulus checks. But if we do, it’s safe to assume that a lot of people may use the opportunity to fund a down payment on a car.
So far nothing in 2020 has turned out as expected.
No one was prepared for a bad second quarter or a record-breaking third quarter. But it’s the dealerships who had systems and processes in place who sold the most and are still riding the wave of success that is predicted to come in the fourth quarter.
If you’re looking for more ways to prepare your dealership for a strong finish to the year, you need to download our free eBook The Ultimate Guide To Supercharging Your Dealership. Get your free copy here.