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California’s Vehicle Market Recovering, Improvements Expected to Continue

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.


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.


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. 

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