This annual report provides an in-depth analysis of the economic impacts of California new car and truck dealers on the California’s economy. It includes estimates of employment, personal income, tax collections generated by California new car dealers, charitable contributions and COVID-19 business operation impacts. Also included is a review of dealership financial statistics and operations.
State New Light Vehicle Registrations Predicted to Approach 1.8 Million Units in 2021
SACRAMENTO, CA – 2021 is already showing signs of improvement for California’s vehicle market. Despite indications that recovery has begun, consumers are still facing financial challenges and uncertainties during the global pandemic. However, the demand for vehicles is making a comeback and we expect California’s new and used vehicle market to continue to rebound this year.
As a result of the Coronavirus, vehicle sales, both new and used, took a tremendous hit during the early months of 2020. Even with promising days ahead for the industry, California vehicle sales fell 21.7 percent in 2020, compared to U.S. vehicle sales which saw a 14.4 percent decline overall. Despite this drastic decline, the market was still 58 percent higher than the lowest point in 2009 during the Great Recession. According to the California Auto Outlook Fourth Quarter 2020, anticipated new vehicle sales are projected to increase by about 8 percent and approach 1.8 million in 2021.
“The welcome trend of increased consumer demand is a great sign of recovery for the vehicle market. 2020 was a tough year for everyone but we remain optimistic that better days are ahead. However, there are still many uncertainties with the future of the pandemic, consumer confidence, unemployment, and available inventory so with that optimism also comes a healthy dose of realism,” said California New Car Dealers Association Chairperson, Mark Normandin, owner of Normandin Chrysler Jeep Dodge Ram FIAT. “As the demand increases and the trend holds steady for larger, family friendly vehicles, despite the pandemic, I remain confident in the great products and valuable services we continue to offer consumers to fit their unique requirements. We will weather this storm and come out of this stronger, and more ready and eager to serve the transportation needs of nearly 40 million Californians, while keeping our customers and employees safe and healthy.”
New and Used Sales
Regardless of COVID-19 and its impacts on the economy, used vehicle sales continue to perform better than new vehicles sales. Used vehicle sales experienced an 8.5 percent decline from 2019 to 2020 compared to a 21.7 percent decline for new vehicle sales in the same timeframe. For a national comparison, U.S. new vehicle sales dropped 14.4 percent. With the used vehicle market expected to remain strong for a majority of 2021, we can expect the outperformance trend to continue.
Segment Market Share
Larger, more family-friendly vehicles continue to be in high demand by consumers, with non-luxury SUV’s leading the 2020 segment market share in California, making up 33 percent of sales, an increase of 3 percent from 2019. Pickups and vans made up 18 percent of the market, an increase of 1 percent from the previous year and small cars falling 2 percent from 2019, from 18 percent to 16 percent.
Alternative Powertrains
The electric and hybrid vehicle market continued to show growth in 2020, with new hybrid vehicle sales making up 6.9 percent of the market, new electric vehicle sales ended the year at 6.2 percent, and plug-in hybrid vehicles making up 1.9 percent of the market. The market share for these vehicles increased nearly 2 percentage points from 2019, from 13.2 percent to 15 percent through the fourth quarter of 2020.
Model and Brand Rankings
During the fourth quarter of 2020, the Honda Civic held on to its top spot as California’s best-selling model in the new vehicle market. The Toyota RAV4 came in as a close second to the Civic and held on to the number one spot for the best-selling compact SUV with nearly 24 percent of the market segment, and the best-selling brand in six-year-old or newer used vehicle market, with more than 13 percent market share.
Regional Variances
While regional variances between Northern California and Southern California continue to show similarities, Southern California declines remain less severe, particularly in the San Diego region where sales were down less than 14 percent overall in 2020. The San Francisco Bay Area saw an overall decline of nearly 24 percent and LA and Orange Counties nearly 20 percent. Northern California year over year sales were down 17.8 percent and Southern California sales were down 16.3 percent.
The California Auto Outlook Fourth Quarter 2020 Market Report provides comprehensive information on the state’s new vehicle market. The report includes annual trends, two-year perspective, segment watch, including the top five models in each segment, brand scoreboards, regional comparisons and more. The complete report can be accessed on CNCDA’s website at: www.cncda.org
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California Auto Outlook, is produced for CNCDA by Auto Outlook, Inc., an independent research company specializing in the analysis of statewide and regional automotive markets. When reporting these auto industry trends please acknowledge the Data Source: Experian.
About CNCDA
For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2019 and employed more than 140,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with more than 1,100 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.
State Market Shows Signs of Recovery; 12 Percent Increase Predicted for 2021
Contact: Jenny Dudikoff
Phone: 916-599-5415
SACRAMENTO, CA – As consumers continue to navigate the challenging times of 2020, California’s vehicle market is showing signs of recovery amid the global pandemic. With notable improvements since the second quarter, the industry is trending to continue improving going into 2021, with pent up consumer demand and low interest rates continuing to support the anticipated rebound.
As a result of the Coronavirus, vehicle sales, both new and used, took a tremendous hit during the early months of 2020. However, the third quarter has shown to be more promising for the industry, despite the expected overall decline this year. According to the California Auto Outlook Third Quarter 2020, anticipated new vehicle sales are projected to reach 1.67 million in 2020, a 20 percent decline from 2019 and reach about 1.9 million next year, an increase of 12 percent from this year.
“With the rate of decline in the California market significantly eased in the third quarter, we are encouraged by the improvements we are seeing in the marketplace and especially in consumer demand. While there are many factors involved in this recovery including consumer confidence, available inventory, slow improvement in employment, and the uncertainty around COVID-19, we are on the right trajectory,” said California New Car Dealers Association Chairperson, Mark Normandin, owner of Normandin Chrysler Jeep Dodge Ram FIAT. “The automotive industry has always been resilient with the ability to swiftly adapt, and this year is no different. We will continue to work hard to support the rebound of sales while having an emphasis on health and safety to keep our customers and employees safe and healthy.”
New and Used Sales
While COVID-19 and its impacts on the economy has taken a significant toll on all vehicle sales this year, used vehicle sales continue to perform better than new vehicles sales. Used vehicle sales have experienced an 8.2 percent decline during the first nine months of 2020, compared to a 24.6 percent decline for new vehicle sales in the same timeframe. For a national comparison, U.S. new vehicle sales are down 18.4 percent.
Segment Market Share
Larger, more family-friendly vehicles continue to be in high demand by consumers, with non-luxury SUV’s leading the in segment market share in California, making up 33 percent of sales, an increase of 3 percent from last year. Pickups and vans make up 18 percent of the market, an increase of 2 percent from last year and small cars falling three percent since last year, from 19 percent to 16 percent.
Alternative Powertrains
The electric and hybrid vehicle market has continued to show growth in 2020, with new hybrid vehicle sales making up 6.4 percent of the market, new electric vehicle sales at 6.1 percent, and plug-in hybrid vehicles making up 1.8 percent of the market. The market share for these vehicles has seen a slight increase from this time in 2019, from 13.4 percent to 14.3 percent through the third quarter of 2020.
Model and Brand Rankings
During the third quarter of 2020, the Honda Civic held on to its top spot as California’s best-selling model in the new vehicle market, with Toyota, Honda, and Ford as the top brand leaders in the state. Toyota also holds the number one spot for the best-selling compact SUV with the RAV4, and the best-selling brand in six-year-old or newer used vehicle market, with nearly 13 percent market share.
Regional Variances
While regional variances between Northern California and Southern California are similar, Southern California declines are occurring at a slightly slower pace. Northern California new passenger car sales are down 32.3 percent and new light truck sales are down 12.4 percent. The southern portion of the state is doing only slightly better with a decline in new passenger car sales of 28.1 percent and a decline in new light truck sales of 11.5 percent.
The California Auto Outlook Third Quarter 2020 Market Report provides comprehensive information on the state’s new vehicle market. The report includes annual trends, two-year perspective, segment watch, including the top five models in each segment, brand scoreboards, regional comparisons and more. The complete report can be accessed here.
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California Auto Outlook, is produced for CNCDA by Auto Outlook, Inc., an independent research company specializing in the analysis of statewide and regional automotive markets. When reporting these auto industry trends please acknowledge the Data Source: Experian.
About CNCDA
For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2019 and employed more than 140,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with more than 1,100 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.
Contact: Jenny Dudikoff
916-441-2599
SACRAMENTO, CA – Brian Maas, president of the California New Car Dealers Association, issued the following statement in response to Governor Newsom’s Executive Order to ban the sale of new gasoline-powered vehicles by 2035:
“While we greatly respect the Governor’s ambition and emphasis on California leading the fight to combat climate change, we have many unanswered questions about fundamental components of his Executive Order to ban the sale of gasoline-powered vehicles by 2035, including the implications on consumers and the state’s preparedness to take on such a directive.
“Foremost, if the policy is ultimately adopted, this will transform how Californians move about our state. Such a significant public policy change and drastic shift in how Californians operate every single day requires addressing, upfront, critical elements to how this directive will be met including:
“Additionally, bypassing the elected Legislature and directing the California Air Resources Board (CARB) to adopt rules to prohibit the sale of non-ZEV vehicles to enact this significant transportation policy change is deeply troubling and deprives Californians of a direct voice in this important issue.
“While we support the state’s goals to combat climate change, there are many questions and factors that need to be thoughtfully considered and addressed before implementing such a mandate on consumers.”
Sales Low Point Likely Reached in Second Quarter; 11 Percent Increase Predicted for 2021
SACRAMENTO, CA – As the nation and California ease back into a much-needed vehicle sales rebound amid the global pandemic, new data shows that the low point for the year has likely been reached and the industry will begin a slow climb back up heading into 2021.
As a result of the Coronavirus, vehicle sales, both new and used, took a tremendous hit during the early months of 2020. Despite the sharp, unprecedented sales decline not seen since the Great Recession and the beginning of a slow recovery, we can expect an increase going into 2021. According to the California Auto Outlook Second Quarter 2020, anticipated new vehicle sales are projected to reach 1.63 million in 2020, a 22 percent decline from 2019 and exceed 1.8 million next year.
“This year is unprecedented in so many ways. For dealerships across California, it started with the abrupt changes in vehicle sales. The first four months of the year were some of the lowest points the industry has seen in quite some time, and we are just beginning to find our way out with the hope that the worst is behind us. We see the results of pent-up consumer demand but are trying to balance that with low inventory,” said California New Car Dealers Association Chairperson, Mark Normandin, owner of Normandin Chrysler Jeep Dodge Ram FIAT. “As dealerships look to run their businesses with additional emphasis on health and safety for consumers and employees, we are ready and eager to offer the same value we did pre-COVID, but we are watching whether consumer confidence returns to pre-COVID-19 levels. 2020 has been a long and trying road, but we will continue to do what it takes to move forward in a safe, healthy and prudent manner.”
New and Used Sales
While COVID-19 and its impacts on the economy has taken a significant toll on all vehicle sales, used vehicle sales are performing better than new vehicles, experiencing a drop of 14.5 percent compared to the new vehicle market at a 26.9 percent decline. For a national comparison, the U.S. market is down in new vehicle sales by 23.5 percent.
Passenger Cars vs. Light Trucks
Light trucks continue to outperform passenger cars, experiencing a 20.5 percent decline in the first half of the year versus a 35.6 percent drop for passenger cars. However, the light truck market share in California remains lower than that of the rest of nation, holding 62.5 percent market share in the Golden State compared to 75 percent market share nationwide.
Alternative Powertrains
The electric and hybrid vehicle market continues to grow, showing a very slight increase from the first half of 2019, from 13.2 percent to 13.4 percent for the first half of 2020.
Model and Brand Rankings
During the second quarter of 2020, the Honda Civic regained its top spot as California’s best seller in the new vehicle market, with Toyota, Honda, and Ford as the top brand leaders in the state. Toyota also holds the number one spot for the best-selling non-luxury SUV brand and the best-selling brand in six-year-old or newer used vehicle market, with a 13 percent market share.
Regional Variances
Regional variances between Northern California and Southern California are trending with the overall state and national declines, with Northern California experiencing a slightly higher incidence of decline. The north saw a decline of 31.6 percent in passenger car sales and 16.5 percent decline in light truck sales with the southern portion of the state doing only slightly better with a decline in passenger car sales of 29.5 percent and a decline in light truck sales of 15.7 percent.
The California Auto Outlook Second Quarter 2020 Market Report provides comprehensive information on the state’s new vehicle market. The report includes annual trends, two-year perspective, segment watch, including the top five models in each segment, brand scoreboards, regional comparisons and more. The complete report can be accessed on CNCDA’s website at: https://www.cncda.org/news/auto-outlook-2020-q2/
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California Auto Outlook, is produced for CNCDA by Auto Outlook, Inc., an independent research company specializing in the analysis of statewide and regional automotive markets. When reporting these auto industry trends please acknowledge the Data Source: Experian.
About CNCDA
For more than 95 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2019 and employed more than 140,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with more than 1,100 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.
Contact: Jenny Dudikoff
Phone: 916-599-5415
SACRAMENTO, CA – The California New Car Dealers Association (CNCDA), representing nearly 1,200 new car dealerships statewide, has been further vindicated by its victory against Volvo Car USA over Volvo’s program Care by Volvo (CbV). The Department of Motor Vehicles (DMV) issued a comprehensive report agreeing with CNCDA’s claims that multiple aspects of Volvo’s CbV program violate California law and are illegal. As a result of the DMV findings resulting from the claims brought by CNCDA’s petition, Volvo terminated CbV 1.0 in California – the only state in the nation where Volvo has been forced to terminate the program.
Last week, in a California New Motor Vehicle Board (NMVB) hearing, the NMVB received and reviewed the Department of Motor Vehicles (DMV) investigative report on Volvo’s CbV program. The DMV found numerous violations of California’s vehicle code (VC), demonstrating that Volvo’s CbV had been in violation of the California VC since its inception in 2017. At the NMVB hearing last week, counsel for Volvo publicly stated on the record that they have stopped the illegal “subscription” program in the Golden State.
Volvo also agreed to work closely with the DMV to ensure its new program, CbV 2.0, does not also violate California franchise laws.
“We are extremely pleased with the outcome of the investigation and the overwhelming victory for California’s new car dealers and the motor vehicle franchise system. As a direct result of our petition, Volvo stopped Care by Volvo 1.0 after the DMV agreed with and confirmed our claims that numerous elements of the program were in fact illegal,” stated Brian Maas, President of the California New Car Dealers Association. “It is critical that manufacturers abide by California franchise laws to continue protecting dealers and consumers. Our dealer members support innovation. At the same time, the DMV findings and Volvo’s recent termination of the program further demonstrate that illegal behavior by manufacturers will not be tolerated. CNCDA will continue to hold those accountable who violate the law. We look forward to further monitoring Volvo’s activities and are committed to ensuring they follow the law in the future.”
Early last year, CNCDA filed a petition with the NMVB, the Board heard arguments from both CNCDA and Volvo, and then unanimously ordered that the DMV investigate CNCDA’s claims that as a licensee of the DMV, Volvo was in violation of the California Vehicle Code (VC) by introducing CbV.
The CbV program was aimed at getting consumers to lease their cars directly from Volvo, instead of buying or leasing them directly from a Volvo dealership. Described by Volvo as a “subscription” program, CbV offers customers a two-year lease with a fixed, standardized, pre-determined monthly charge including cost of the vehicle, insurance, maintenance, road hazard protection and normal wear and tear. CbV is currently available for two Volvo models – the XC40 and the S60. Both models are also sold and leased by Volvo dealers directly to consumers outside of the CbV program. Through CbV, Volvo undercuts its dealers on price when the dealers lease the same vehicle to consumers.
In 2018, CNCDA alleged that the CbV program was illegal and violated several provisions in the California VC aimed at protecting franchisees and consumers. The NMVB unanimously agreed that CNCDA’s claims were warranted and directed the DMV to investigate the following specific allegations, each of which constitute a separate ground for disciplinary action against Volvo’s DMV license under the law:
After a six-month long investigation, the DMV issued their written report which found Volvo’s CbV “subscription” program to be illegal and found four specific violations. The DMV ultimately agreed with CNCDA on the first three claims listed above, resulting in “potential legal consequences” constituting cause for license discipline pursuant to the California VC.
During last week’s hearing, Volvo represented to the Board that it terminated CbV in California and that it had “no intention to run it;” therefore, the NMVB decided not to take further action against Volvo. CNCDA will closely watch Volvo’s activities in California in order to protect dealers and will be prepared to monitor how CbV 2.0 unfolds, ensuring it is adhering to California franchise laws.
For more information and details of the DMV’s full report, please click here.
Click here to view the May 14, 2020 Cease and Desist letter from CNCDA attorneys to Volvo Car USA.
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About CNCDA
For more than 96 years, CNCDA has represented the interests of California’s franchised new car dealers. CNCDA members are primarily engaged in the retail sale and lease of new and used motor vehicles, but also provide customers with automotive products, parts, service and repair. Our members sold more than 2 million new cars and trucks in 2019 and employed more than 140,000 Californians, significantly contributing to our state’s economy. As the nation’s largest state association of franchised new car and truck dealers—with nearly 1,200 members—CNCDA serves its members by providing legal compliance and legislative, regulatory and legal advocacy.
California’s 2020 New Vehicle Market Was Off to a Good Start, Until COVID-19 Hit
