Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- What automakers and dealerships need to know
- What automakers and dealerships can do to succeed
- Market overview
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- Figure 1: Total US sales and forecast of market, at current prices, 2015-25
- Impact of COVID-19 on the Car Purchasing Process
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- Figure 2: Short, medium and longer term impact of COVID-19 on the Car Purchasing Process, July 2020
- Opportunities and Challenges
- Plummeting car sales will have longer term effects on auto maintenance
- Social distancing has led to a resurgence of “car culture”
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- Figure 3: Kia “Let’s Road Trip” Campaign, June 2020
- Low new vehicle sales have unintended consequences for the used vehicle market
- Where do we go from here
The Market – What You Need to Know
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- New car sales are down without signs of a rebound any time soon
- Low consumer confidence will cause consumers to think twice before buying a car
- COVID to push more consumers to a two-car household
Market Size and Forecast
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- US auto sales expected to shrink by 20% in 2020
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- Figure 4: Total US sales and forecast of market, at current prices, 2015-25
Market Breakdown
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- New car sales remain down despite month over month rebound
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- Figure 5: US auto sales by brand performance, June 2020
Market Breakdown: Vehicle Ownership
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- COVID-19 could push more households into buying second vehicle
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- Figure 6: Vehicle ownership, April 2020
Market Factors
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- High unemployment rates cause consumers to hold off on car buying
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- Figure 7: Unemployment and underemployment, January 2007 – July 2020
- Low consumer confidence correlates to tanking car sales
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- Figure 8: Consumer Sentiment Index, January 2007 – July 2020
- Low gas prices
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- Figure 9: Consumer Sentiment Index, January 2007 – July 2020
Key Players – What You Need to Know
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- Automakers risk pricing consumers out of the new vehicle market
- Infiniti sets the standard for a digitized car purchasing process
- OEMs continue to pursue an electric future
What’s Happening
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- OEMs respond to COVID-19
- Hyundai
- Carvana
- Subaru
- CarMax
- Chevrolet
- Ford
What’s Struggling
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- More automakers send sedans to the chopping block
What to Watch
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- Despite low gas prices and only moderate interest, automakers forge ahead with EVs
- Infiniti takes virtual showrooms to new heights with video conferencing
The Consumer – What You Need to Know
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- Despite decreasing new vehicle sales, consumers want new cars
- Consumers seek out the dealership with the best price
- Price haggling remains a point of contention for car buyers
- Consumers aren’t going to forgo test drives any time soon
- Cleanliness emerges as a top consumer concern
Vehicle Purchase Intent
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- Consumers are still looking to buy new
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- Figure 10: Vehicle purchase type, April 2020
- Pandemic has yet to significantly change vehicle purchase timelines
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- Figure 11: Purchase intent, April 2020
- Used vehicles largely appeal to young consumers; older consumers plan to purchase new
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- Figure 12: Vehicle purchase type, by age, April 2020
- Financially struggling urban consumers are least likely to own a car
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- Figure 13: Vehicle ownership, by current financial situation, by area, April 2020
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- Figure 14: Purchase intent, by current financial situation, by area, April 2020
- Financially stable male consumers are more willing to purchase a car in the next six months
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- Figure 15: Kia “Accelerate The Good” program, June 2020
- Figure 16: Buick GMC “Here to Help”, April 2020
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- Figure 17: Purchase intent, by current financial situation, by gender, April 2020
Pre-purchase Research Methods
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- Incentives, car performance and features are the most researched items
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- Figure 18: Pre-purchase types of research, April 2020
- In 2020, consumers are looking for a deal
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- Figure 19: Pre-purchase types of research, year over year, April 2020
- Consumers prioritize competitive pricing over sales incentives
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- Figure 20: Pre-purchase incentive related research, April 2020
- Test drives maintain popularity despite the need for social distancing
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- Figure 21: Pre-purchase incentive related research, April 2020
- More consumers beyond Gen Z and Millennials use social media for vehicle research
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- Figure 22: Consumers who use social media as research, April 2020
The Future of Car Buying
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- Consumers hope for a more convenient future car purchasing process
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- Figure 23: Consumers attitudes toward the future of car purchasing, April 2020
- COVID-19 has brought an appointment-based sales process
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- Figure 24: Attitudes toward appointment only vehicle sales, April 2020
- Car buyers envision a DTC car buying model
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- Figure 25: Attitudes toward buying cars direct, by age, April 2020
- Consumers scale back beliefs that Amazon will sell cars
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- Figure 26: Attitudes toward buying a car on Amazon, by age and gender, April 2020
- Consumers continue to hold out for no-haggle pricing
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- Figure 27: Attitudes toward no-haggle pricing, April 2020
Attitudes toward the Car Purchasing Process
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- Cleanliness becomes a top concern for car buyers
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- Figure 28: Attitudes toward car cleanliness, April 2020
- Car buying continues to put stress on consumers, especially during the pandemic
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- Figure 29: Attitudes toward car cleanliness, April 2020
- Consumers view sales events as the prime time to purchase a car
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- Figure 30: Attitudes toward sales events, by generation, April 2020
- Vehicle awards hold more importance to young car buyers
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- Figure 31: Attitudes toward vehicle awards, April 2020
- Consumers want to purchase from OEMs who take care of their employees
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- Figure 32: Attitudes toward OEM treatment of employees, April 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – The Consumer
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- Figure 33: Purchase intent, by current financial situation, by household income, April 2020
- Young consumers have the most immediate need for a vehicle
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- Figure 34: Purchase intent, by generation, April 2020
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- Figure 35: Financially impacted consumer car buying concerns, by current financial situation, by household income, April 2020
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