COVID-19’s appearance near the start of 2020 had a significant impact on the entire globe. It forced many markets to adapt and overcome staggering challenges. Across the automotive industry, many dealers unlocked the secrets of digital innovation in order to better serve their customers. This is just one of the many lessons learned from the past year that dealers plan on bringing into 2021.
On today’s show, we speak with Kevin Tynan, senior automotive analyst for Bloomberg Intelligence, to discuss what went down in 2020 and what dealers should focus on as they look for a fresh start this January.
Like many other automotive industry analysts, Tynan was impressed to see car dealers rally so well in the latter quarters of 2020. However, he says the consequences of COVID-19 will have both positive and negative long-term effects on the auto industry. In 2021, Tynan believes that dealers can expect the following:
- A better supply and demand balance because factories will not be producing high volume and low-margin cars.
- European and Asian-based automakers are catching up on the truck and SUV side.
- SAAR will not look impressive in the beginning months (historically speaking), however, it will signal a healthier mix with higher transaction prices and better margins.
- Opportunities to generate even more revenue in parts and service, as well as used car sales.
- Gross number of transactions might be lower, but the quality of the transaction will be greater
- Franchise dealers are not expected to lose much market share to online retailers like Carvana and Vroom/
- More leasing options will be available to combat affordability issues.
Tynan has over 20 years of research experience as an automotive analyst. Prior to his role at Bloomberg Intelligence, Tynan was also a senior automotive analyst at Argus Research in the Greater New York area. His expertise has also been featured in Forbes, CNBC, and The Wall Street Journal.
