It should come as no surprise that COVID-19 has had a tremendous impact on the automotive industry, just as it has on others. First, the bad news.
“The coronavirus pandemic certainly impacted new light-vehicle sales in 2020, not to mention the U.S. economy as a whole,” said Patrick Manzi, chief economist for the National Association of Auto Dealers in their analysis of auto sales last year. “Our forecast at the start of 2020 estimated new light-vehicle sales would fall by 1 to 2 percent compared to 2019 for a total of 16.8 million units sold, but once COVID hit, we knew this would be a different year than anticipated.”
As 2020 came to a close, new-light vehicle sales of 14.46 million units were down 14.7% compared to 2019. While the overall new-vehicle market fell by 14.7%, consumer retail sales only declined by an estimated 9%, according to their report.
Now, the good news.
While the U.S. motor vehicle market suffered with a significant drop in automotive sales, there were signs of recovery as the nationwide shutdown came to an end. Demand, however, exceeded supply on popular models once shoppers began to hit the showrooms again followed by a shortage of models because of earlier manufacturing shutdowns.
At Central Chevrolet in West Springfield, sales manager Ed O’Grady says they “did not notice” a drop in business, but the pandemic did prompt the dealership to make some difficult decisions regarding staffing, selling and how they would sell while their showroom was closed.
“COVID-19 brought many people to purchase online by appointment, but online has not replaced the human touch. In fact, the biggest change for our customers has been the importance to have an appointment to purchase a vehicle,” O’Grady says. “People still want to test drive a vehicle and see it in real life before they purchase. We continue to offer touchless deliveries and salesman free demonstration rides.”
Central also saw an increased demand for used vehicles over the summer months due to a shortage of new model vehicles. And, interest in electric vehicles continues to grow as pricing, according to O’Grady, “has never been better.” He adds, “Chevrolet is coming out with a new EUV (Electric Utility Vehicle) this spring. It will be an all-electric, 400-mile range type of SUV.”
“All things considered we had a good year,” says Mike Marcotte, owner of Holyoke’s Marcotte Ford Sales. In part, he explains, new car sales for Ford dropped as the car maker stopped making the Fusion in July, didn’t add any new sedans and is shifting focus to SUVs. It prompted used car sales – and prices – to go up, according to Marcotte.
Adds general manager Mike Filomeno about November’s sales numbers, “Our new car sales were down, used sales were up, and commercial sales were up. We’re a prominent truck dealer in the area with the Ford F-Series, Transit, and Super Duty vehicles. Contractors were having a busy year with home renovations since people weren’t spending their money elsewhere during the coronavirus. That fact combined with tax incentives and depreciation write offs at the end of the year led to many contractors and outside workers replenishing their fleets.”
Also, in Holyoke, Gary Rome Hyundai and its Kia counterpart in Enfield didn’t feel the big pinch of the coronavirus pandemic.
“We’ve had one of our best years ever, and we were actually up 19% over last year,” says owner Gary Rome. “One of the main reasons for that is that our manufacturers didn’t take their foot off of the gas pedal and continued their production. They also began offering the highest rebates I’ve ever seen.”
Like any other brands, Rome says 68% of his dealerships’ sales are in the SUV category. “People love them because they ride and perform like cars and have extra room that people may never use but want just the same,” he says. “Also, we have an aging population who want to be up higher from the ground making it easier for them to get in and out of the vehicle.”
Looking ahead, Rome expects to see “the same increase as last year or slightly higher.” “I believe that people have COVID fatigue and are feeling down,” he says. “In reality, life is short, and people want to do something nice for themselves like buying a new car, even if they don’t really need a new one.”
While Mercedes-Benz sales were down around the country, Peter Wirth, co-owner of Mercedes-Benz of Springfield with his wife Michelle Wirth, says their dealership’s story is “slightly different.”
“While sales were down, independent of the coronavirus, we were still on a significant growth pattern after only opening in 2017, so it is hard to compare our losses with other years,” Wirth says.
Spring saw a significant impact on the dealership.
“Our showroom was closed, and we went through different iterations of opening,” he explains. “At first, we would bring cars to customers at their homes or workplaces to test drive. Then, in the early stages of reopening, it was by appointment only and we would allow just one customer in at a time.”
Once they returned to traditional retail and customers once again were bringing their cars in for service, some of those changes may “stay with us for the future and evolve,” Wirth says.
“Our brand has a significant experiential component to it. People like to come in and see the car, feel the wheel and smell the leather. But I think many will still prefer doing the paperwork online or Facetime us with questions about their new car after receiving it,” he says. “And, I think those who didn’t take us up on the offer pick up their car for service and delivering it back to them, will realize how more convenient it is for them.”
Wirth is “cautiously optimistic” for a better 2021, and notes the big story for them is an entire family of SUVs to offer customers and the coming introduction of several new electric models under a line called EQ with the first arriving this year.
Artioli Dodge Chrysler RAM in Enfield saw a new-vehicle sales recovery in the second half of 2020 as retail consumers returned to dealer lots, according to general manager Joseph Artioli.
“We started the year off great, then COVID-19 hit and we ended up doing probably 50% of what we would have normally done in those early months of the disease,” he says. “As a result, we had to furlough 90% of our employees, but eventually brought them all back to work in May.”
Light duty trucks and SUVs make up the majority of his business, according to Artioli. “They are making pickups today that are as nice as any sedans,” he says, “lush and good on fuel, and the same holds true for our SUVs. You will find features available on our RAM pickups and SUVs that people only dream about having on a high-end sedan.”
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