2020 Auto Industry Trends for New and Used Cars
The Lot Blog
Projections for new and used car sales in 2020 are making their way around the auto industry.
Used Car Sales
Used car sales are expected to rise through 2020, according to Edmunds.com, while used car prices are expected to decline. While a drop in car prices may not necessarily be music to your ears as a dealer, it does mean higher demand for used cars, hence the projected increase in used car sales.
Jessica Caldwell, Edmunds’ executive director of industry analysis, says used cars will continue to grow in popularity in the coming years.
“Used vehicles will likely grow in popularity as new-car substitutes if incentives continue to stagnate and interest rates creep up.,” said Caldwell. “A large quantity of near-new used vehicles are expected to come into the market that will undoubtedly offer a compelling value message that resonates with discerning new-car shoppers.”
New Car Sales
Projections for 2020 new car sales are slower than in past years, as car dealers are still trying to sell off 2018 inventory. According to Tyson Jominy, Vice President of Automotive Data and Analytics Consulting for J.D. Power, 3.5 percent of July 2019 new car sales were 2018 model years, meaning approximately 49,000 of 1.4 million new cars sold in the U.S. last July were prior year models.
Jominy said that July would’ve been the time to start selling down the 2019 model year cars in order to make room for the 2020 models. However, given the fact that there was still a significant amount of 2018 inventory on dealership lots during that time, dealers were hesitant to stock new 2020 models.
Since car sales for 2018 models were high all throughout last year, this could be evidence of falling demand for 2020 models, according to Jominy.
“We may need to see production cuts,” he said. “The industry isn’t getting any bigger and hard choices might have to be made.”
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