Car and truck sales still down in California, but the numbers are improving – The San Diego Union-Tribune


The COVID-19 outbreak led to a brutal start to 2020 for California’s car and truck dealers, but the latest figures indicate the market is showing signs of recovery.

After vehicle registrations plummeted 48.9 percent in the second quarter compared to the same three-month period in 2019, third-quarter numbers released Wednesday showed a decline of 19.6 percent, according to a report from the California New Car Dealers Association.

The trade group also bumped up its sales projections for California to 1.67 million registrations by the end of this year — about 130,000 more than it predicted at the end of March.

“Things are getting better,” said Brian Maas, the new car dealers president said. “We’re pleased with the fact that we’ve recovered from the trough that we saw in the spring and hopefully the market can continue to be stable as we work through this COVID crisis.”

Through the first nine months of the year, retail sales of vehicles — which excludes “fleet sales” that come from commercial businesses, such as rental car outlets — were down 19.5 percent in California. San Diego County did a little better, reporting a 16.5 percent drop.

Continuing a trend that developed well before the pandemic, customers keep gravitating to buy SUVs and pickup trucks. The “light truck” segment accounted for 63.3 percent of the new vehicle market through the third quarter, compared to just 36.7 percent for cars.

“The typical consumer buys the biggest vehicle they can afford in the vehicle class they’re looking in,” Maas said.

While the Honda Civic remained the top-selling vehicle in California through the first nine months of this year, the Toyota RAV4 came in second and five of the 10 best-sellers were pickups or SUVs.

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The Tesla Model 3 finished sixth and while combined sales for electric and hybrid vehicles were down compared to the first three quarters of 2019, their overall market share is up about 1 percent to 14.3 percent.

Relatively speaking, the market for used vehicles is doing better than the new vehicle market, with registrations down 8.2 percent through September. Interestingly, sales of used vehicles between 7 to 10 years old were actually up 3.6 percent, perhaps indicating that consumers may be more focused on buying a less expensive car during tough economic times.

Ivan Drury, who studies automotive trends as senior manager at Edmunds.com, said California’s numbers are in line with national numbers, reflecting pent-up demand from consumers and low — or even zero — interest rate car loans that have led to a bit of an uptick.

“We were going away from personal transportation and now we’ve taken a complete U-turn with the pandemic,” Drury said. “People said, ‘Oh wait, I don’t want to get into a (ride-sharing) car, I don’t want to share a bus, I don’t want to do these things’ … Now people are back to buying cars.”

Dealerships have been quick to adapt to a COVID-19 business environment by emphasizing online purchases, filling out paperwork with customers remotely and encouraging potential buyers to make appointments instead of arriving at the showroom unannounced.

To assuage customers’ concerns about cleanliness facial coverings are required and dealers like John Hine Mazda in Mission Valley have assigned an employee to constantly circulate around the showroom, wiping down surfaces with disinfectant.

Customers in general have “more or less adapted as a society to this COVID era,” Maas said. “Nobody’s happy about it, for sure, but we’ve figured it out and if we need transportation, we know that the dealerships are open and there are vehicles available.”

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For 2021, the trade group forecasts sales of 1.87 million vehicles — lower than the 2 million registration racked up by the Golden State in recent years but considerably better than what was feared when pandemic restrictions were first put in place.

But like virtually every segment of the economy, the auto industry faces a lot of uncertainty in the wake of the pandemic.

While Drury said the numbers indicate “we’re definitely on the rebound,” he questioned whether 2 million in annual new vehicle sales in California will be seen in the immediate future.

“The return to work date keeps getting pushed further and further out and some people might think, ‘How can I justify the cost’” of buying a new car, Drury said. “I think 1.8 million (in annual sales) wouldn’t surprise me.”

Top-selling models in California in 2020
(through September)
1. Honda Civic 46,046
2. Toyota RAV4 41,715
3. Toyota Camry 40,466
4. Ford F-Series 38,260
5. Toyota Corolla 31,936
6. Tesla Model 3 31,548
7. Honda Accord 31,369
8. Chevy Silverado 31,259
9. Ram Pickup 29,412
10. Honda CR-V 24,653
Source: AutoCount data from Experian, California New Car Dealers Association





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