17.1 Million New Vehicles Will Be Sold in 2020, Edmunds Predicts
There’s been talk of a slowdown in vehicle sales in recent years. Experts predicted that America’s post-recession new vehicle binge would inevitably be slowed by higher interest rates on loans, increasingly unaffordable vehicle prices and the tendency of millennials to shun vehicle ownership in favor of ride sharing services. Well, hold those thoughts.
The experts at Edmunds are now predicting that 2020 might just be another year of historically high new vehicle sales for the automotive industry.
As part of the Edmunds 2020 Automotive Industry Trends Report, analysts forecast that a total of 17.1 million new vehicles will be sold in 2020, matching last year’s tally and marking the sixth year in a row that new auto sales will top 17 million.
“The auto industry has some decent tailwinds heading into 2020: Strong economic factors such as low unemployment and high consumer confidence are carrying over from last year, finance rates are expected to remain relatively stable, and this is a presidential election year, which historically tends to correspond with a year-over-year lift in new vehicle sales,” said Jessica Caldwell, executive director of industry insights at Edmunds.
Although new vehicle sales are expected to be in a healthy place this year, Edmunds analysts note that rising prices present some roadblocks for the industry.
According to Edmunds data, the average transaction price (ATP) for a new vehicle in 2019 climbed to an all-time record of $37,183, and prices are only expected to keep rising.
“Prices are shooting up because shoppers are opting for pricey SUVs and trucks packed with more high-tech options than ever before,” said Caldwell. “These increased costs, combined with the discontinuation of more affordable options like domestic passenger cars, could prompt shoppers to shift their focus to the used market — or delay their purchase altogether.”
The Edmunds Industry Trends Report predicts:
A resurgence of hybrid vehicles, particularly versions of the popular RAV-4, CR-V and Escape, will drive green car sales to record market share. Edmunds analysts estimate that hybrid vehicles will grow by 18% in 2020, pushing the green car market to a record market share of 4.8%, compared to 4.3% in 2019.
Car sales are expected to hit an all-time low. Edmunds experts predict that market share for passenger vehicles will drop to 24% in 2020, which will translate to fewer cars sold than at the bottom of the recession. With the departure of many car nameplates, SUV market share will cross 50% for the first time.
Trucks are growing increasingly popular as an alternative to SUVs. The ongoing expansion of “lifestyle trucks” is expected to push the crew-cab segment to new record highs: Edmunds analysts predict that crew cabs will constitute 80% of all truck sales in 2020.
CPO sales will hit a new record high as millions of off-lease vehicles flood dealer lots and create an affordable option for shoppers priced out of the new market. Edmunds experts forecast that 2.81 million certified pre-owned vehicles will be sold in 2020.
Prepare for this Market by Visiting Your Credit Union
If you’re considering a new or used vehicle purchase in 2020, go see your credit union. CUs have some of the best deals on vehicle loans. Your CU can pre-qualify you for financing – giving you a crucial edge when negotiating the terms of your next purchase on a dealer’s lot.
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