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ALG, a subsidiary of TrueCar, has made an updated 2020 new vehicle sales forecast to account for the quickly evolving coronavirus (COVID-19) pandemic and the latest economic outlook.

  • 15.3m (optimistic):

        Movement restrictions lifted 1 May
        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 to the end of summer (end of August)
        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 13m range for 2020,” said Eric Lyman, chief industry analyst at 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.”

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“We cannot stress this enough, automotive sales will return,” added Morgan Hansen, VP, data science at ALG. “The ageing US 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 15.5m vehicles per year. Sales below this figure are not ‘lost” but merely deferred until we see a return to our daily routine.”

Lyman added: “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.” 

All scenarios are absent severe impacts and “speculative pessimism” from:

  • Widespread supply chain or vehicle production disruption
  • Prolonged social distancing beyond six months
  • Prolonged closure of auto dealerships beyond 45-60 days
  • Stimulus packages delayed or ineffective
  • Significant and sustained declines in macro-economic fundamentals (demand)

Shutdowns to cost European auto industry GBP29bn