With the new year comes new products, new sales, and excited consumers on the hunt for the best of the best. However, manufacturers and dealers in the automotive industry know not to get excited too soon. Car buying trends for 2021 look a bit different than previous years due to the ongoing COVID-19 pandemic.
2020 Changed Car Buying Trends Significantly
Consumers across industries are under the microscope – they have been since the start of the COIVD-19 pandemic. Consumer behaviors changed drastically, and the entire automotive industry was upended entirely.
The pandemic not only put a hold on car sales but brought manufacturing to a standstill. Automotive parts from China are no longer exported due to border closures, and the need to manufacture vital pieces of machinery for hospitals increased. There were large scale manufacturing interruptions across the globe, and the lockdowns in the U.S. lead to the closure of assembly plants across the country.
This, along with hundreds of thousands of canceled plans/trips, led to dismal sales during the first three quarters of the year, with a decrease in overall sales compared to 2019. During these months, there was a -17% change in year-over-year sales in the U.S. alone. When comparing these changes month by month, March saw a -38% change from the previous year, while April saw a -46% change.
Consumers have nowhere to go and little need for purchasing a new car. Dealerships have no way of unloading their 2019 stock and limited stock on new 2020 models. While industry experts say that the industry is expected to recover, the recovery process will take some time, with sales not reaching pre-COVID-19 levels until 2023 at the earliest.
With the proper precautions in place, the automotive industry is ready to start catering to the new industry normal.
4 Car Buying Trends Expected for 2021
What does this new normal look like? The automotive sector is relying on consumers to help them make their comeback. To do so, the industry has become extremely customer-centric. That means car buying trends for 2021 are going to cater to the consumer's needs, and here's what that is expected to look like:
1. More Shoppers Looking for Deals
The end of 2020 left millions of people wondering "what's next," as the number of COVID-19 cases began rising once again and new strains started appearing across the globe. This has left consumers, dealerships, and manufacturers wondering what the industry's fate will look like as 2021 emerges.
The good news for dealerships and manufacturers? More consumers are on the hunt for their own vehicles. With the resurgence of the virus and the appearance of new strains, more consumers are wondering just how safe public transportation and ridesharing is.
Studies show that 93% of individuals choose to use their personal vehicles more often to stay healthy.
With more consumers looking to use their own vehicle, they are turning to dealerships for answers. Dealerships, on the other hand, are looking to consumers to help them stay afloat. Prices for all makes, models, and years have been cut to encourage shoppers to make an investment that can be quite intimidating, especially during this economy.
However, consumers are interested in purchasing their own vehicle, and Google can prove it. According to Google Trends, the search term "is it a good time to buy a car" is slowly starting to rise after plateauing during the fall of 2020. This indicates a rising interest in buying; however, only if the price is right.
2. Car Shopping from Home
One of the most notable car buying trends that took off in 2020 and that is expected to continue through 2021 is car shopping from home.
With lockdowns making it rather challenging to physically visit dealerships, consumers started heading online to start their shopping process. Once they've found something they liked, 18% of consumers stated that they would make a purchase (or purchase sooner) if there was an online purchasing option.
Not only are consumers turning to online shopping and online purchasing options, but they are also researching dealerships that offer at-home test drives and home delivery once the purchase is complete. The less contact with others involved, the more comfortable consumers seem.
3. Expect Delays in 2021 Releases
With so many delays in the production of parts and the manufacturing of vehicles, it comes as no surprise that the industry is expecting significant delays in the release of 2021 makes and models. Not only that, but dealerships have a surplus of 2019 and 2020 inventory to get rid of, contributing to the lower prices that consumers are after.
In fact, of the 38 redesigned/new 2021 model year vehicles that were to be released in 2020, 12 have been pushed to 2021. There is also a chance that these delays can continue well into the new year if the current situation doesn't improve.
4. Increased Connectivity to Increase the Customer-Centric Experience
Finally, as we continue to move into the future, 2021 car buying trends are leaning more towards connectivity than ever before. Technology trends in the auto industry are leaning more and more towards connecting consumers to their vehicles, creating the ultimate user experience.
With approximately 3.5 billion people using smartphones globally, and with ongoing efforts to keep drivers’ eyes on the road, it's not surprising that the auto industry is looking for more ways to connect those smartphones to the user's vehicle. Doing this enables voice and gesture activation to keep drivers' hands on their wheel and their eyes on the road ahead of them.
Car Buying Trends for 2021 Seemingly Will Favor the Consumer
If we've learned anything from the past year, it's that to survive as a business, you must prioritize the customer and their needs. With more people looking for their own vehicles to minimize the risk of exposure, dealerships have the opportunity to offload their current stock, allowing them to bring in new stock and new consumers.
By implementing a customer-centric approach to the new year, dealerships have a fighting chance at seeing success despite the uncertainty surrounding COVID-19 and the travel restrictions imposed on millions of individuals.