ALG Revises 2020 New Vehicle Sales Forecast Scenarios Based on Latest Impact of COVID-19
March 23 2020 - 9:00AM
ALG, a subsidiary of TrueCar, and the industry benchmark for
determining the future resale value of a vehicle, is providing an
updated 2020 new vehicle sales forecast to account for the quickly
evolving Coronavirus (COVID-19) pandemic and the latest economic
outlook. ALG will be revising its forecast weekly along with major
new developments.
15.3M (Optimistic):
-
- Movement restrictions lifted May 1
- Stimulus packages deployed and having a positive impact
13.2M (Mixed):
-
- Multiple social distancing periods limit out of home
activity
- Stimulus packages deployed and having a positive impact
- Supply disruption due to production stoppages
11.2M (Cautious):
-
- Ongoing social distancing and limited out of home activity
through summer
- Prolonged downturn, limited success of stimulus packages
- Increased unemployment throughout 2020
“With the temporary closure of dealerships across the nation,
continued declines in the stock market and ongoing uncertainty
around the short/mid-term strategy to battle COVID-19, ALG expects
further declines in our annual automotive sales forecast. While
events continue to unfold daily, it seems the most likely outcome
is vehicle sales landing in the mid 13 million range for 2020,”
said Eric Lyman, Chief Industry Analyst for ALG.
“A dependable personal automobile will continue to play a
critical role in daily life. Even during ‘stay at home’ orders
vehicles will be used to get essential employees to work, deliver
food, run critical errands and provide a safe transport in a time
when public transportation is limited or unavailable,” continued
Lyman.
“We cannot stress this enough, automotive sales will return,”
said Morgan Hansen, Vice President, Data Science at ALG. “The aging
U.S. vehicle fleet and growth of millennial market are underlying
pillars of strength in mid to long-term auto sales. Natural
replacement demand remains steady at roughly 15.5 million vehicles
per year. Sales below this figure are not ‘lost,’ but merely
deferred until we see a return to our daily routine.”
Added Lyman, “Online shopping and digital retailing will play a
critical role in mitigating the drop in vehicle sales. Automakers
are already rolling out innovative incentive products to stimulate
consumer demand but the industry must iterate on existing sales
practices and become more accommodating to shoppers in a ‘stay at
home’ environment.”
Note: All scenarios are absent severe impacts and “speculative
pessimism” from:
- Widespread supply chain or vehicle production disruption
- Prolonged social distancing beyond 6 months
- Prolonged closure of auto dealerships beyond 45-60 days
- Stimulus packages delayed or ineffective
- Significant and sustained declines in macro-economic
fundamentals (demand)
About ALG
Founded in 1964 and headquartered in Santa Monica, California,
ALG is an industry authority on automotive residual value
projections in both the United States and Canada. By analyzing
nearly 2,500 vehicle trims each year to assess residual value, ALG
provides auto industry and financial services clients with market
industry insights, residual value forecasts, consulting and vehicle
portfolio management and risk services. ALG is a wholly-owned
subsidiary of TrueCar, Inc., a digital automotive marketplace that
provides comprehensive pricing transparency about what other people
paid for their cars. ALG has been publishing residual values for
all cars, trucks and SUVs in the U.S. for over 55 years and in
Canada since 1981.
About TrueCar
TrueCar is a leading automotive digital marketplace that
enables car buyers to connect to our network of 16,500 Certified
Dealers. We are building the industry's most personalized and
efficient car buying experience as we seek to bring more of the
purchasing process online. Consumers who visit our marketplace will
find a suite of vehicle discovery tools, price ratings and market
context on new and used cars -- all with a clear view of what's a
great deal. When they are ready, TrueCar will enable them
to connect with a local Certified Dealer who shares in our belief
that truth, transparency and fairness are the foundation of a great
car buying experience. As part of our
marketplace, TrueCar powers car-buying programs for over
250 leading brands, including AARP, Sam’s Club, and American
Express. Nearly half of all new-car buyers engage
with TrueCar powered sites, where they buy smarter and
drive happier. TrueCar is headquartered in Santa
Monica, California, with offices in Austin,
Texas and Boston, Massachusetts.
For more information, please visit www.truecar.com, and
follow us on Facebook or Twitter. TrueCar media
line: +1-844-469-8442 (US toll-free) |
Email: pr@truecar.com
TrueCar and ALG PR Contact:Shadee
Malekafzalishadee@truecar.com424.258.8694
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