Major carmakers reported that sales in the third quarter had declined compared to a year ago – but far less than the significant decline in sales in the second quarter.
“It’s coming in better than we thought,” said Michelle Krebs, a senior analyst at Cox Automotive.
Better than the train
She said the pandemic has also created savings from pre-holiday, entertainment and restaurant meals that some buyers use for new car purchases. And some city dwellers have increased interest in owning a vehicle as some seek to relocate to the suburbs and others want to flee the city over the weekend, she said.
The jump in new housing construction has also helped drive demand for pick-up trucks, and the rebound in the stock market after the sale earlier this year has restored household wealth for some buyers who may have postponed some purchases.
Will not return to normal anytime soon
Uncertainty about the economy, the election and the pandemic will continue to act as a drag on sales, he said. Krebs also noted that credit is tightening up, especially on the subprime part of the business.
“The rates are low if you have good credit,” she said. “But we’re seeing more and more people knocked out of the new car market because they can’t get credit.”
Krebs and Brauer both predict full-year U.S. sales of about 14 million vehicles, down from 17 million in 2019. Although Krebs does not yet have a forecast for 2021 sales, she noted that her company does not believe the industry will return to 17 million anytime soon.
Some automakers said sales in September were ahead of where they were in 2019, though the timing of the Labor Day weekend a year ago, when it was counted as part of August sales, makes direct comparison from month to month month somewhat difficult.