2020 Auto News Auto Sales USA automobiles

5 reasons COVID-19 pandemic gives the edge to cars, SUVs, pickups

Not long ago, in the pre-pandemic age, carmakers braced for the possibility that Americans would eventually stop buying vehicles, choosing instead to rely upon ride-hailing, especially once self-driving car technology becomes widely available.

But COVID-19 has upended those expectations, swinging the pendulum back in the direction of personal car ownership as Americans say they’re increasingly likely to drive themselves instead of riding in someone else’s car or taking mass transit.

Of Americans currently shopping for vehicles, more than 1 in 5, or 22%, had not planned to buy one before the pandemic began, according to a recent survey by car-buying site CarGurus.

Times are still challenging for the industry. Car sales have declined in 2020 due to the economic downturn and record unemployment. The Center for Automotive Research, a nonprofit that tracks the industry, projected 2020 U.S. sales of about 13 million vehicles, down from a previous forecast of about 17 million.

But the long-term trends may be positive for automakers.

Among car shoppers who had used ride-sharing, about 2 in 5, or 39%, say they plan to use those services less often from now on, according to the June CarGurus survey. And among car shoppers who previously used mass transit, more than 2 in 5, or 44%, say they plan to take public transportation less often.

On the whole, 1 in 3 say they expect to use their vehicle more often when the pandemic is over.

“The conclusion is that people are really seeing cars in a new light, both as an escape – a way to get away from the quarantine and stress that we’ve all had over the past several months – but also as a safe way to get around,” said Madison Gross, director of consumer insights for CarGurus.

The bottom line: While analysts say it’s difficult to know exactly how transportation will change after the coronavirus, the death of personal car ownership has been greatly exaggerated.

Here are five trends boosting cars:

1. Concerns about ride-hailing safety

Ride-hailing apps Uber and Lyft have taken steps to require masks and roll out disinfecting processes. But their ridership has dropped as Americans, who don’t need to get around as much at the moment, have grown more apprehensive about riding in vehicles that strangers are using throughout the day.

Will those concerns linger beyond COVID-19? That’s harder to say.

But at the very least, the pandemic has caused some to be wary of ride-sharing vehicle surfaces, which were already known to carry significant bacteria.

“If people feel safer in their cars rather than going through car-sharing services, that should bode well for us because we’re in the business of selling new cars,” Hyundai sales executive Randy Parker said in an interview. “So we welcome that opportunity to have those consumers take a look at our product.”

2. Concerns about mass transit.

Riding in the subway or taking the bus has fallen out of favor for many commuters – even those who are still traveling to their workplaces.

Concerns about coming face-to-face with fellow commuters are potentially significant, especially considering that epidemiologists say COVID-19 is often spread through close face-to-face contact.

In New York City, dealerships are reporting an influx of former mass transit users who are looking to buy a car for the first time in a while or even for the first time ever.

“We know anecdotally that in places like big urban areas – New York City particularly – people who have never bought a car before” are suddenly in the market for new vehicles, said Michelle Krebs, analyst for car-buying site Autotrader.

3. Road-tripping is in

With flight travel down significantly, Americans are hitting the road, traveling to places where they can safely practice social distancing or simply drive to avoid flying.

More than 1 in 10 Americans have gone camping for the first time in 2020, while 1 in 5 have visited a national park for the first time, according to a Harris Poll funded by Chevrolet and released Thursday.

Also, “people are driving long distances to see family who they might otherwise have flown” to see in the past, Gross said.

About half of car shoppers say they view their car as an escape right now, according to the CarGurus survey. And that’s affecting what people buy.

“You may buy a vehicle that’s more suited to taking trips. The mid-size three-row SUVs is a hot market right now,” Krebs said, pointing to vehicles like the Hyundai Palisade, Kia Telluride and Subaru Ascent.

Hyundai’s Parker said the three-row Palisade has been “a major bright spot” for the company during this period. Introduced in 2019, it’s passed the Sonata mid-size sedan as Hyundai’s fourth best-seller so far in 2020.

Another segment that’s benefiting: Pickups, especially of the mid-size variety, such as the Toyota Tacoma and Chevrolet Colorado.

Analysts say pickups continue to gain momentum as Americans look to buy vehicles that can easily tow things.

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