There’s good news to be heard for car dealerships and other similar businesses. Auto sales are remaining strong, and this trajectory is expected to continue well within the year. It’s probably going to be a good year for people in the auto industry, especially if everything goes well with the vaccine rollout.
Cracks in the Road
The entire U.S. auto industry suffered the deepest decline it has ever experienced in decades. Auto sales only amounted up to 14.5 million in the previous year, which was equivalent to a 15% drop compared to 17.1 million sales in 2019. This was primarily due to shutdowns in production and dealership closures.
In fact, the losses could have been worse if the demand for private vehicles didn’t surge towards the end of the year. There is a lot of optimism from experts that this year’s auto sales will do better, but not exactly up to pre-pandemic levels. Most of them are forecasting an increase of around 7% to 10% for 2021. Strong consumer demand is expected to remain in the months ahead.
As the post-pandemic world draws nearer, it will also entail a return to daily operations. People have developed an increasing fear of taking public means of transportation. This is what fueled the demand for private vehicles. For those in the auto industry, the biggest challenge is capitalizing on this upward trend before it’s too late. Here are the key areas you should focus on to help boost your business.
Something New, Something Old
There has always been a split between buying new cars against the used car market. While it’s mainly a matter of consumer preference, there are certain external factors to be considered. Due to the unfortunate circumstances of the pandemic, used cars gained a price advantage over new cars in the previous year.
Regardless, the biggest element that drives the replacement cycle of a car is wear and tear. To make purchases more appealing for consumers, consider fostering a partnership with an automotive styling company. Offering services that will generally help a customer’s car last longer will definitely give your business an edge over other competitors.
A Necessary Transition
One of the most drastic shifts that reshaped the auto industry was how vehicle sales were conducted. Like almost every other operation, the global pandemic forced a digital shift in the car buying experience. Consumers found it appealing that they no longer have to hop from one dealership to another to compare vehicle models and prices.
The transition to e-commerce was always an expected phenomenon, and the unfortunate circumstances accelerated that shift. Begin investing in creating and optimizing the digital platform of your business as early as now. Being able to consumers with a seamless experience from end-to-end will surely boost performance and customer retention.
Across various markets, whether new or used, there has always been a consistent demand for larger vehicles like pickup trucks and SUVs. The preference for these types of vehicles is expected to continue into the year. Increasing the business inventory supply for large vehicles sounds like a good idea, but there are certain vulnerabilities to look out for.
The average selling price for pickup trucks and SUVs is considerably higher compared to the lower ends of the markets. Affordability is extremely crucial right now for consumers looking to buy a vehicle, especially as the threats of mass unemployment and economic turmoil loom. Just be aware that the strong consumer demand is motivated by people looking to find economic alternatives to public transport.
Cars of the Future
The market for electric vehicles (EV) and autonomous vehicles (AV) continues to experience record sales despite the circumstances. Alongside the global pandemic, the climate crisis’s devastating effects also became more apparent in the previous year. As a result, more consumers will be looking for significant ways to reduce their carbon footprints.
These types of vehicles are expected to dominate in this year’s auto markets. While displaying and selling EVs and AVs can prove to be a little costly for most dealers, offering them to consumers will pay off. Plenty of people have shifted their preference towards electric-powered vehicles for their sustainability, comfort, and modern edge. Keep your business open to these kinds of opportunities.
Foot on the Gas
Auto sales are slowly returning to normalcy. While it may not be as strong as it was pre-pandemic, it’s still a significant improvement. There’s no doubt that the global pandemic drastically reshaped the landscape for the auto industry. The road to 2021 was an extremely bumpy and unpleasant ride for everybody, but it’s about to get better. As the world continues its journey towards recovery, it’s bringing auto sales along with it.