Although the auto industry continues to manage disruptions caused by the COVID-19 crisis, analysts say that the market shows strong signs of recovery
The car shopping experts at Edmunds say that the third quarter represents a positive turning point for the automotive industry. The COVID 19 pandemic has definitely created challenges to the industry. Edmunds analysts forecast that 3,850,707 new cars and trucks will be sold in the U.S. This reflects an 11% decrease from the third quarter of 2019. But, it is a 30.6% increase compared to the second quarter of the year.
“Third-quarter sales make at least two things apparent: Most of the doomsday scenarios forecasted at the beginning of the pandemic fortunately did not hold true. In addition, the American consumer stepped up to become one of the many heroes in this chapter of resilience for the automotive industry, ” said Jessica Caldwell, Edmunds’ executive director of insights. “Consistently lower interest rates encouraged new-car buyers to pull the trigger on a purchase. These are buyers who were less likely to be financially hindered by the economic fallout of the pandemic. Rising used vehicle prices also likely made the new car market more appealing for shoppers on the fence between the two. Car owners also got to leverage the extra value that trade-ins are commanding during COVID-19 to offset the cost of their next purchase.”
Although retail sales have shown positive growth, Edmunds experts note that fleet sales continue to struggle during the pandemic. Edmunds estimates that fleet transactions will account for 10.8% of total sales for the third quarter. This is compared to 17.2% in the third quarter of 2019 and 13.2% last quarter.
“The last piece of the puzzle for the industry’s recovery is fleet sales,” said Caldwell. “Daily rental companies have understandably reduced or delayed orders. Americans continue to stay at home rather than embark upon business or air travel. It will likely take a bit longer for this side of the business to make as dramatic a comeback as its retail counterparts.”
Scource: SANTA MONICA, Calif., Sept. 24, 2020 /PRNewswire/ — Talia James-Armand, Associate Director, PR & Communications, PR@Edmunds.com, http://www.prnewswire.com/news-releases/new-vehicle-retail-sales-make-a-roaring-comeback-in-the-third-quarter-edmunds-forecasts-301137458.html