California’s 2020 New Vehicle Market Was Off to a Good Start, Until COVID-19 Hit

Contact: Jenny Dudikoff
Phone: 916-599-5415

SACRAMENTO, CA – Early this year, California new vehicle sales were off to a solid start, then COVID-19 hit, and the industry took a downward turn overnight, like many other retail industries across the nation. While 2020 new vehicle sales were projected to slightly dip from 2019 and reach about 1.82 million, no one could have expected where the industry finds itself now. According to the California Auto Outlook First Quarter 2020, anticipated new vehicle sales for 2020 will only reach 1.54 million, a 26 percent decline from 2019. 

“Going into 2020, we knew we had a year ahead of us that was going to be slightly down in the new car market with the potential for a continued shift to used car purchases, but no one could have predicted this,” said California New Car Dealers Association Chairperson, Mike Weseloh, owner of Weseloh Chevrolet-Kia in Carlsbad. “California’s new car dealers are business owners, entrepreneurs and continuously find ways to adapt to market conditions and this unparalleled crisis is no different. Automobile dealers are committed to our businesses, our employees, our customers and most importantly to the rebound of California’s retail automotive industry. Like many industries across the country, we have a tough road ahead but will do what it takes to move forward in a safe, healthy and prudent manner to get back on our feet.”

While COVID-19 and its impacts on the economy has taken a significant toll on vehicle sales, not all market segments are down. The non-luxury SUV market increased to above 30 percent during the first quarter of the year. This trend carries over from 2019, demonstrating the shift in consumer purchasing behavior leaning towards larger, more family-friendly vehicles.

Regional variances between Northern California and Southern California are nominal for the first four months of the year, with the north experiencing a decrease of 21.2 percent and the south seeing a decrease of 20.9 percent. However, San Diego County experienced only an 18.6 percent decrease in sales and the San Francisco Bay Area saw a decrease of 23 percent. It’s possible this is a product of the early shelter-in-place orders that went into effect in Bay Area counties before similar orders were issued in counties down south.

“A rebound in the California automotive retail industry greatly depends on a number of factors including unemployment, consumer confidence, developments of treatments or vaccines for the virus and how health and safety mandates continue to unfold,” said California New Car Dealers Association President, Brian Maas. “Our members are eager to get back to work and look forward to getting their businesses up and running. With all California dealerships now allowed to be open, we are confident that we are on an upward trajectory and hope market conditions stabilize over the course of 2020, but there is still much to be seen in this phase of recovery.” 

The California Auto Outlook First 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.