CoVid-19 Industry Updates

CoVid-19 Industry Updates (134)

Black Book released its Used Vehicle Retention Index for December 2020, showing it at 128.8, a 1.8-point decline from November’s 130.6.

“The seasonally adjusted Retention Index has remained relatively stable since August,” said Alex Yurchenko, SVP, data science. “Nevertheless, due to record-setting summer months, the year ended with a 15.5-point (or 13.7 percent) year-over-year change in the Index. In fact, only the Minivan Segment did not have a year-over-year increase in the Index.”  

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published Wholesale Average value on two- to six-year-old used vehicles, as percent of original typically-equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition.

The Index dates to January 2005, where Black Book published a benchmark index value of 100.0 for the market.

During 2020, it saw the largest drops and increases in the Index due to supply and demand pressures during the COVID-19 pandemic. 


Mitsubishi Motors North America Inc. (MMNA) saw its first year-over-year decrease in U.S. sales since 2012, breaking a string of seven straight years of sales growth. For the full calendar year, the company reported sales of 87,387, a decrease of 28 percent. For the fourth quarter of the year, MMNA sold 14,770 vehicles, a decrease of 42 percent compared with the same period in 2019. 

A key part of the company’s year-long effort was to focus on improving the overall and long-term health of the franchise dealer network and Mitsubishi Motors business by reducing both dealer stock (50 percent reduction compared to December 2019) and fleet sales. Actions undertaken throughout 2020 were instrumental in preparing Mitsubishi Motors dealers for what promises to be a strong 2021, with growth and improved profitability brought about by key new model launches in the first quarter of the new year.

Looking ahead in 2021, Mitsubishi Motors’ plan to reinvigorate its presence in the U.S. marketplace continues in full force. By the end of the first quarter of 2021, the brand will launch three considerably upgraded vehicles, the redesigned 2022 Eclipse Cross, redesigned 2021 Mirage and Mirage G4, and the all-new next-generation 2022 Outlander.

Edmunds forecast that 4,036,744 new cars and trucks will be sold in the U.S. in the fourth quarter of 2020. This reflects a 2.8 percent increase in sales from the third quarter but a 5.7 percent decrease from Q4 of 2019. Edmunds analysts also estimate that 14,416,447 new vehicles will be sold in 2020, which reflects a 15.5 percent decrease in sales from 2019. Although this will put 2020 on track to be the lowest sales year for the automotive industry since 2012, Edmunds experts say that the number is much stronger than expected given major disruptions created by the outbreak of the coronavirus (COVID-19) pandemic.

Jessica Caldwell

“Thinking back to the dire state of the market at the outset of the pandemic, it’s such a testament to the incredible durability of the entire automotive industry — and the resilience of the American consumer — that we’ve seen such a healthy rebound in new car purchases this year,” said Jessica Caldwell, Edmunds’ executive director of insights.  “A big comeback story of 2020 is without a doubt the recovery of retail vehicle sales, which have nearly returned to pre-pandemic levels.”

Edmunds experts note that the steady rise in average transaction prices (ATP) was another bright spot for the industry, because the increase also helped drive profitability for automakers and dealers.

“It’s certainly not much of a buyer’s market right now: Inventory is still in short supply in certain areas, and automakers and dealers aren’t faced with the pressure to use big discounts to clear out their lots like they normally do at this time of year,” said Caldwell. “Although that’s not stopping higher-earning consumers from continuing to enter the new market like they have throughout 2020, car shoppers who are a bit more price-sensitive might want to skip holiday shopping and wait until next year if they’re looking for big bargains.”

Edmunds analysts note there are still uncertainties ahead in 2021, but they remain confident that industry sales will continue at a steady pace without a dramatic decline like the one seen at the outset of the pandemic.

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.7 percent in October to 108.2 (2016 = 100), following a 0.7 percent increase in September and a 1.6 percent increase in August.

“The U.S. LEI rose again in October, with widespread improvements despite weakness from housing permits and consumers’ outlook on economic conditions. However, the leading index has been decelerating in recent months, which suggests growth will moderate significantly in the final months of 2020, slowing down from the unusually rapid pace in Q3,” said Ataman Ozyildirim, senior director of economic research at The Conference Board. “Furthermore, downside risks to growth from a second wave of COVID-19 and high unemployment persist. While The Conference Board projects the U.S. economy will expand in Q4, the pace of growth is unlikely to exceed 2.2 percent (annual rate).”


A new survey from Ally finds that cars and personal transportation are more essential to people's lives than prior to the COVID-19 pandemic.

Seventy-two percent of car owners say that going for a drive alone allows them to clear their head, according to a survey of 2,000 American adults conducted by OnePoll on behalf of Ally Financial. Nearly three-quarters of men (73 percent) and more than half of women (53 percent) consider their car to be their personal “fortress of solitude.”

In addition, the pandemic has caused Americans to rethink their desired mode of transportation. Nearly three out of four Americans, 72 percent, are wary of using public transportation because of COVID-19. This isn't just a short-term trend—69 percent of car owners say they plan on driving more after the pandemic ends rather than use public transportation.

“Even though many of us are using our vehicles differently, cars are more vital than ever, serving as a source of solitude and providing a safe means of travel for us and our families,” said Mark Manzo, president of Ally Insurance.

When it comes to work-related driving, 45 percent are spending less time driving—or not driving at all—to and from work. Meanwhile, 26 percent of gig-job drivers, such as DoorDash or Instacart, have increased their time behind the wheel.

Ally's survey also finds that many car owners are dealing with stress concerning auto expenses. Dealers can market vehicle service contracts in the midst of these challenges. More than half of drivers (57 percent) are worried about unexpected repair costs, and 58 percent may hold on to their current vehicle longer than originally planned. The survey results also highlighted the tough choices many car owners have made due to the pandemic: More than one in three (36 percent) have had to choose between a car payment or car repair.

Used vehicle trade-in values are returning to normal levels after skyrocketing during the summer months, according to Edmunds.

Data from Edmunds reveals that the average value for all vehicles traded in during the month of October dropped to $15,874, a 3.3 percent decrease compared to $16,411 in September. The average value for 3-year-old vehicles also dipped in October to $20,401, a 1.7 percent decline compared to $20,747 in September.

“After experiencing a remarkable surge over the past few months, used car values are finally cooling down now that some of the major supply issues faced by the industry are being addressed,” said Jessica Caldwell, Edmunds' executive director of insights. “While inventory is still tight in some areas, we're expecting to see more lease returns make their way to the used market. This steady supply of near-new inventory will help address the increased demand we've been seeing in the market during COVID-19.”

Edmunds also took a look at trade-in values for some of the most popular cars, SUVs and trucks sold in the U.S. – the Toyota Camry, Honda CR-V and Ford F-150 – and found that they all notably decreased across the board in October compared to September. The average trade-in value for all used Toyota Camrys dropped to $12,508, a 7.6 percent decrease compared to $13,539 the previous month. The average trade-in value for all used Honda CR-Vs fell to $15,461, a 3 percent month-over-month decrease from $15,943. And the average trade-in value for all used Ford F-150s dropped to $23,677, a 5 percent decrease compared to $24,911 in September

Although used car values have decreased, Edmunds data reveals that the average transaction price (ATP) for used vehicles has stayed relatively flat because of the increased supply of near-new off-lease and off-rental vehicles hitting the market.

In the week ending November 7, the advance figure for seasonally adjusted initial claims was 709,000, a decrease of 48,000 from the previous week’s revised level. The previous week’s level was revised up by 6,000 from 751,000 to 757,000. The 4-week moving average was 755,250, a decrease of 33,250 from the previous week’s revised average. The previous week’s average was revised up by 1,500 from 787,000 to 788,500. The advance seasonally adjusted insured unemployment rate was 4.6 percent for the week ending October 31, a decrease of 0.3 percentage point from the previous week’s revised rate. The previous week’s rate was revised down by 0.1 from 5.0 to 4.9 percent.

The advance number for seasonally adjusted insured unemployment during the week ending October 31 was 6,786,000, a decrease of 436,000 from the previous week’s revised level. The previous week’s level was revised down by 63,000 from 7,285,000 to 7,222,000. The 4-week moving average was 7,575,750, a decrease of 653,000 from the previous week’s revised average. The previous week’s average was revised down by 15,750 from 8,244,500 to 8,228,750.

According to’s latest analysis of over 1.2 million used car sales in October 2020, used car prices had an average increase of 9.5 percent or $2,193 compared to the previous year. 

“Interest rates are lower than normal, which can help offset heightened used car prices for anyone who needs a car in the short term,” said iSeeCars Executive Analyst Karl Brauer.

Every vehicle segment increased in price compared to last year, while convertibles, coupes, and pickups all increased far above average.

Used vehicles with the greatest price increases are made up of mainly sports cars and pickup trucks. The vehicle that has the greatest price increase is the BMW 5 Series luxury midsize sedan, which has risen in price by 25 percent or $6,924 in October 2020 when compared to October 2019

Dodge Challenger made the list

Five American performance cars make the list: the Dodge Charger muscle car and four sports cars, including the Ford Mustang coupe and convertible, the Chevrolet Camaro, and the Dodge Challenger.

Four pickup trucks make the list including the second-ranked Ram Pickup 1500, the fifth-ranked GMC Sierra 1500, the ninth-ranked Toyota Tundra, and the tenth-ranked Chevrolet Silverado 1500.

Vehicles with the greatest price drops have decreases ranging from 1.1 to 8.4 percent and are made up of mostly SUVs across varying price points as well as two minivans, two hybrids, and one sedan.  The vehicle with the greatest price decrease is the Chevrolet Volt plug-in hybrid vehicle, which was discontinued after the 2019 model year.

Two subcompact SUVs make the list including the second-ranked Ford Ecosport and the seventh-ranked Nissan Rogue Sport. Three luxury SUVs make the list including the fourth-ranked compact Buick Envision, the fifth-ranked midsize Cadillac XT5, and the eighth-ranked compact Porsche Macan.

The Dodge Dart midsize sedan, which was discontinued after the 2016 model year ranks sixth. Rounding out the list are two minivans: the third-ranked Chrysler Pacifica and the ninth-ranked Kia Sedona.

BBVA Research published its October auto sales chartbook, noting vehicle sales have experienced a V-shaped recovery, increasing 36 percent in the third quarter of 2020 from the previous quarter.  However, sales are still 10 percent below levels observed in Q3 of 2019.

The chartbook, authored by BBVA Research Principal Economist Marcial Nava, forecasts that sales could be affected in the long run by changes in consumer behavior resulting from the pandemic, including people relocating away from urban areas and the increasing rate of remote work among employees across the U.S.

Will the pandemic change consumer behavior over the long term?

There has also been an increased demand for used vehicles, which are better supplied than new units due to pandemic-induced disruptions in new vehicle production, according to the report.

According to the report, total new vehicle sales are expected to reach 14.5 million units in 2020, the lowest since 2012. Low interest rates, extended loan terms, higher personal savings and solid residential construction have all contributed to the resiliency of new vehicle sales, as have the rebound in the stock market and an increasing preference for car ownership.

Some segments do remain subdued, including fleet demand, due to sluggish airline and tourism-related activities, the report stated.

Sales of electric vehicles have also declined, down 41 percent year-over-year as a results of COVID-19, reduction in government incentives and the ongoing conflict between the federal government and the state of California over fuel economy standards, the reported stated.

Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 31.4 percent.

The GDP estimate is based on source data that are incomplete or subject to further revision by the source agency. The second estimate for the third quarter, based on more complete data, will be released on Nov. 25.

The increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans) and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The increase in PCE reflected increases in services (led by health care as well as food services and accommodations) and goods (led by motor vehicles and parts as well as clothing and footwear). The increase in exports primarily reflected an increase in goods (led by automotive vehicles, engines, and parts as well as capital goods).

Currentdollar GDP increased 38.0 percent, or $1.64 trillion, in the third quarter to a level of $21.16 trillion. In the second quarter, GDP decreased 32.8 percent, or $2.04 trillion.

Page 1 of 10