Strength of the economy, stable finance rates expected to help prop up new vehicle sales in 2020
But experts caution that rapidly rising vehicle prices could force more shoppers out of the new market.
SANTA MONICA, Calif., Jan. 16, 2020 /PRNewswire/ — 2020 is looking to be another year of historically high new vehicle sales for the automotive industry, according to a new report from the car shopping experts at Edmunds.
As part of the Edmunds 2020 Automotive Industry Trends Report, analysts forecast that a total of 17.1 million new vehicles will be sold in 2020, matching last year’s tally and marking the sixth year in a row that new auto sales will top 17 million.
Car-buying platform Edmunds.com serves nearly 20 million visitors each month. With Edmunds.com Price Promise(R), shoppers can buy smarter with instant, upfront prices for cars and trucks currently for sale at over 10,000 dealer franchises across the U.S.
“The auto industry has some decent tailwinds heading into 2020: Strong economic factors such as low unemployment and high consumer confidence are carrying over from last year, finance rates are expected to remain relatively stable, and this is a presidential election year, which historically tends to correspond with a year-over-year lift in new vehicle sales,” said Jessica Caldwell, executive director of industry insights at Edmunds.
Although new vehicle sales are expected to be in a healthy place this year, Edmunds analysts note that rising prices present some roadblocks for the industry. According to Edmunds data, the average transaction price (ATP) for a new vehicle in 2019 climbed to an all-time record of $37,183, and prices are only expected to keep rising.
“Prices are shooting up because shoppers are opting for pricey SUVs and trucks packed with more high-tech options than ever before,” said Caldwell. “These increased costs, combined with the discontinuation of more affordable options like domestic passenger cars, could prompt shoppers to shift their focus to the used market — or delay their purchase altogether.”
The Edmunds Industry Trends Report also takes a deeper look into other major factors that will shape the industry through 2020:
A resurgence of hybrid vehicles, particularly versions of the popular RAV-4, CR-V and Escape, will drive green car sales to record market share. Edmunds analysts estimate that hybrid vehicles will grow by 18% in 2020, pushing the green car market to a record market share of 4.8%, compared to 4.3% in 2019.
Car sales are expected to hit an all-time low. Edmunds experts predict that market share for passenger vehicles will drop to 24% in 2020, which will translate to fewer cars sold than at the bottom of the recession. With the departure of many car nameplates, SUV market share will cross 50% for the first time.
Trucks are growing increasingly popular as an alternative to SUVs. The ongoing expansion of “lifestyle trucks” is expected to push the crew-cab segment to new record highs: Edmunds analysts predict that crew cabs will constitute 80% of all truck sales in 2020.
CPO sales will hit a new record high as millions of off-lease vehicles flood dealer lots and create an affordable option for shoppers priced out of the new market. Edmunds experts forecast that 2.81 million certified pre-owned vehicles will be sold in 2020.
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America’s best workplaces by Fortune and Great Place to Work, Edmunds is based in Santa Monica, California, and has a satellite office in Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.