The valuation analysts at Kelley Blue Book reported the estimated average transaction price for a new, light vehicle in the United States was $37,736 in March 2020. New-vehicle prices increased $972 (up 2.6 percent) from March 2019, while dropping $38 (down 0.1 percent) from last month.

“While the automotive industry and broader U.S. economy were brought to a near halt in March, average transaction prices remained stable from February and increased from this time last year, showing strength in line with the first two months of the year,” said Tim Fleming, analyst for Kelley Blue Book. “Prices were supported by the abundance of incentives quickly enacted by manufacturers and their captive finance companies, including 0 percent financing for 84 months and payment deferrals of up to 180 days.”

With most of the country encouraged to stay at home for at least another month and unemployment skyrocketing as a result, the impact of this year’s auto sales will be severe. Production is also at a standstill, as North American factories have been shut down for weeks. For March, new-vehicle prices remain solid, but there are still many unknowns about April and what the state of the economy will be for the remainder of the year.

Mitsubishi Motors North America Inc. (MMNA) reported March sales of 9,394 vehicles, down 52 percent over March of 2019. Calendar year-to-date sales through the end of March totaled 35,563 vehicles, a decrease of 15.5 percent compared with the same period in 2019.

In response to the ongoing COVID-19 outbreak, all MMNA headquarters and regional team members began working from home as of March 16. As of April 1, 97 dealerships (28 percent of MMNA’s national count) have closed the sales side of their facilities, and another 94 (27 percent) are open by appointment-only, due to local government order. MNA and its dealer partners continue to monitor federal, state and local requirements and guidelines pertaining to public health and are reacting accordingly, with the safety of customers, team members and their families, and communities as the highest priority.

Going forward, MMNA will transition to quarterly sales reporting, with April – June sales reported on July 1.

Black Book projects a significant reduction in U.S. new vehicles sales in 2020, despite low interest rates, cheap fuel and increased OEM  incentives.

However, the company said there is a high probability that the sales of older, cheaper vehicles in good condition will not decline as much due to increased demand on those units.” 

Black Book’s March 30 COVID-19 Market Update predicts new-car sales to drop to 2009-levels this year and sees challenges in the auction lanes, including increased no-sale and low-values on sold units, but remarketers do not plan to lower floors at this time, the report stated.

Dealers have so far held a “wait-and-see” attitude, Black Book reported.

Black Book predicts a 40 percent drop of U.S. new-car sales to 10.2 million this year due to recession, increased unemployment, consumer confidence and supply chain issues.

Chinese auto sales fell 21.6 percent in January and 80 percent in February, the reported stated.

Manheim continues hosted digital sales at press time, while some independent auctions remained open but moved to virtual sales.

Factories have announced closures. Ford has pushed back the date for rebooting some of its factories in North America. The Detroit automaker had planned to reopen an assembly plant in Mexico on April 6 and several other plants, including one in Dearborn, on April 14. The company has not announced when the plants will reopen.

Honda, Toyota and others have goals to also to open up production in April, Black Book reported.

The report projects a short-term drop in 1- to 6-year-old  wholesale prices and an overall drop of 13 percent in wholesale prices.

Genesis Motor North America has appointed Tedros (Ted) Mengiste as Executive Director, Sales Operations, Genesis Motor America. He will be responsible for sales, retail operations and client experience in the United States. Mengiste will report directly to Mark Del Rosso, president and CEO Genesis Motor North America.

Mengiste’s appointment is an extension of his 23-year career in automotive marketing, sales and service roles where he most recently served as Regional Vice President at Infiniti’s largest area/zone. Mengiste’s experience includes leadership in regional sales, retailer training, market representation, product management and marketing.

Mengiste has an MBA from the University of Michigan, Ross School of Business and a Bachelor of Science in Business Marketing from Indiana University.

Research from found that while many dealerships are experiencing historically low foot traffic and many have closed showrooms completely, tens of millions of people are still actively engaged in car purchases online.

Despite the shutdowns caused by COVID-19, data demonstrates that nearly 80 percent of visitors are searching and viewing inventory with high intent to purchases. The research revealed three key trends impacting the automotive sector driven by the COVID-19 outbreak:

  1. Car shoppers are looking to connect digitally. Shoppers are also interested in handling price negotiations (48 percent) and financing (42 percent) online.
  2. Cleanliness concerns are swaying nearly one in five consumers toward car purchases and it is also affecting ride-sharing. The coronavirus pandemic has pushed 17 percent of survey respondents to now consider purchasing a car. The main reasons for increased urgency include a desire to stop riding public transportation (43 percent) and distrust in the cleanliness of others’ cars (28 percent). Furthermore, of the consumers who plan to buy a car, 1 in 3 have decided to speed up their timeline due to the outbreak.
  3. Auto dealers are ramping up digital and home-delivery capabilities. As consumers look to connect digitally with dealers across the country, there is an increased desire for more digital services and home delivery options. Among dealer survey respondents, most are ramping up their digital retailing capabilities such as online financing (57 percent) and online estimates for trade-ins (40 percent), while others are focused on online chat options (36 percent) and offering local home delivery of vehicles (49 percent)..

Trending News

F-150 Tops Most-Searched List

F-150 Tops Most-Searched List

Jun 03, 2020 Rate: 5.00

iRecon Revamps Platform

iRecon Revamps Platform

Jun 03, 2020 Rate: 0.00

Group 1 Appoints CFO

Group 1 Appoints CFO

Jun 03, 2020 Rate: 5.00