Five Changes To The Auto Industry Due To The Pandemic
Car Pro | January 20, 2021
Cars.com is looking at the future of car buying amid the ongoing coronavirus pandemic - which its analysts say forever changed car buying and selling. It sees five top trends advancing the auto space in 2021 and says changes will persist this year as Americans continue to spend more time at home and online, place a premium on the freedom car ownership provides, and keep affordability and electric vehicles top of mind.
"In the new virtual-first environment, digital platforms have significantly increased in importance for small businesses across the country, dealerships included, as the need persists to virtually connect with at-home shoppers," said Alex Vetter, Cars.com Inc. CEO. "The new year will bring fast and persistent adaptation in our industry as consumers continue to rely on cars as an extension of their homes and look for frictionless digital experiences from their local dealerships. America's car dealers are well positioned to meet these expectations head-on as technology takes center stage, and we welcome this new era of digital car buying and selling."
Cars.com predicts the following trends will have the most long-term impact on car shopping in 2021:
New wave of car buyers emerge: With the Centers for Disease Control and Prevention stating that cars are the safest transportation option during the pandemic, nearly 50% of people surveyed by Cars.com say they continue to rely less on mass transit and ride-sharing services. This has placed a premium on the freedom and safety car ownership provides, resulting in a new wave of first-time car buyers. Of Americans who previously did not own a car, nearly 20% are considering purchasing one. Even as consumers return to life outside the house, the primary mode of transport will continue to be the car.
The driveway becomes the dealer lot: In 2021, at-home delivery of vehicles and trading in vehicles from the driveway will become more mainstream. Last year, 57% of car buyers conducted the bulk of their vehicle purchases online, and several opted for contactless home delivery from their local dealership. Since April 2020, more than 10 million vehicles on Cars.com ó approximately 30% of total inventory listed on the site ó have been available for home delivery from dealers across the country.
Virtual selling streamlines car buying: As dealership adoption of digital tools and technology increases, car shoppers can expect more of the purchase process to take place on virtual selling platforms such as chat, video and dealer websites. Stay-at-home consumers are driving advancement in these platforms and shifting them from merely communications tools to selling tools. As it stands, more than 70% of consumers want to conduct at least some parts of the purchase online.
Affordability is at the forefront for consumers: Car shoppers will continue to keep affordability top of mind this year. Approximately 45% of new-car shoppers are interested in vehicles over $30,000, while nearly 40% of used car buyers are interested in cars under $10,000. Although low interest rates and favorable credit conditions are helping keep monthly payments down for buyers, lean vehicle inventory conditions have resulted in unusually high new- and used-car prices. As a result, shoppers are prioritizing more comfortably priced vehicles.
Advancement in EVs with federal support and evolved technology. Electric vehicles could have a big year in 2021 as the incoming administration supports the EV market with consumer incentives, infrastructure plans and federal fleet purchases. With tech companies such as Apple rumored to enter the market, and automakers like Hyundai, Ford and GM announcing plans to significantly invest and expand their EV platforms, it's clear the race for EV domination is on.
"Despite the positive momentum expected in the EV category this year, hybrids and EV searches made up less than 1% of total site searches on Cars.com in 2020, signaling a long road ahead until mainstream adoption," added Vetter.
Low interest in electric vehicles is not deterring automakers, however. GM and Kia both revealed new branding this month aimed at highlighting their commitment to electrified lineups and mobility solutions.
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