U.S. new vehicle sales surprisingly resilient despite pandemic
Analysts like Michelle Krebs of AutoTrader threw their 2020 U.S. new vehicle sales forecasts out the window when the pandemic struck the U.S.
Many were fearing the worst - a catastrophic plummet to sales similar to the worst years of the Great Recession.
And indeed, in March and April, new vehicle sales did fall into the basement.
"But as quickly as they plummeted they started rising again," says Krebs. "It's been remarkable how the consumer, the dealers and the auto manufacturers have been so resilient and adaptable."
The resiliance and adaptability is in large part due to the split nature of the pandemic - which threw millions of workers in jobs in the service industry and the like into severe financial hardship, while leaving many of those with white collar jobs unscathed.
"People who have money aren't spending it on travel and vacations and other things, so they're putting a lot of money into pickup trucks and SUVs," says Krebs, "but millions of Americans have been knocked out of the market altogether."
Krebs notes that for quite some time, new vehicles have been less and less affordable for lower income consumers, and the pandemic worsened the trend, as people lost jobs or saw their credit scores become damaged if they missed paying some bills.
AutoTrader expects the year to end with 14.3 million new vehicles sold in the U.S., with the decline from 2019 (from 17 million) largely explained by a precipitous decline in fleet sales to companies that maintain fleets, like rental car companies.