Changes in the auto industry during COVID-19

With the Covid-19 outbreak in China in February, the crisis in the car industry began as well. It forced factories to close, and sales collapsed. The situation with the used car market wasn't any better.

Over the past few months, car and truck production has been paused around the world. Only in China, factories have resumed production after a long suspension in February caused by the corona virus. In other parts of the world, automakers have stopped almost all assembly lines.

COVID-19 has definitely affected dealers’ sales expectations for this period of year.

However, with lifted stay-at-home orders, stimulus checks, the delayed tax season, and never-before-seen OEM incentives, consumer confidence is coming back.

Over the past months dealership traffic and sales have been down across the nation, but studies from across the industry are showing that not only has the decline slowed, shopper activity is actually starting to increase.

Autotrader have been tracking the anticipated delay in car purchases over the past 6 weeks and for the first time since March, delay percentages are decreasing. Which is great news because it means that situation is getting better, and it gives us hope that soon we will have a normalized automotive industry.

Three automakers in Detroit and their suppliers began restarting assembly lines recently after a two-month corona virus lock down in a slow revival of a sector that employs nearly 1 million people in the United States.

Hundreds of workers at Fiat Chrysler Automobiles' truck plant in Warren, Mich., were returning to their daily routine and job with the message: "Let's restart."


One quarter of shoppers went from “not sure” to now wanting to purchase cars sometime within the next 5 months. 

Also Google is saying that search term “Used car for sale” has increased by 30% since March, and 52% of auto shoppers report that the Corona virus has still not changed their timeline to buy a new vehicle according to Google, Global Auto Pulse Insights.

Vehicle Sales Are Slowly Recovering

According to recent reports, sales volume is also up in all 25 major markets, and there is a record of improving car sales.  

National registrations are also increasing double week-over-week, across the 7 eastern states who are slowly reopening their economies.

At the time of the outbreak, most of the factories stopped working. As a result, new cars stopped being produced. This means that Franchise dealers, whose main business is selling new cars, start buying and selling used cars. Franchise dealers shifted from selling new cars to selling used cars because the automotive industry was transformed. 

More precisely, franchise dealers are selling used cars, more than usual, because they need to keep their business running.

And now because of the amount of capital that most of them have, they are able to take better cars for higher prices that are more cost-effective. Leaving the used car dealers with not so good choices.

While used car dealers do not have that amount of capital, they cannot afford to buy the cars at the prices at which Franchise dealers are buying.

That’s why auto dealers must embrace digital marketing, and digital channels for selling used cars now more than ever. Because 72% of car shoppers are online now, this number is increasing, and in the online battle we can all be equal.

You can try our digital posting service with a 30 days free trial, it’s Craigslist and Facebook Marketplace included.

Call us at +1-650-753-8000 or reach us at

We are happy to help and advise you.

Other Popular Posts