BBVA Research published its October auto sales chartbook, noting vehicle sales have experienced a v-shaped recovery, increasing 36 percent in the third quarter of 2020 from the previous quarter. However, sales are still 10 percent below levels observed in 3Q2019.
According to the report, total new vehicle sales are expected to reach 14.5 million units in 2020, the lowest since 2012. Low interest rates, extended loan terms, higher personal savings and solid residential construction have all contributed to the resiliency of new vehicle sales, as have the rebound in the stock market and an increasing preference for car ownership.
Some segments do remain subdued, including fleet demand, due to sluggish airline and tourism-related activities.
Government support has helped consumers repay auto loans, containing pressures on delinquency rates, though credit standards have tightened nonetheless. There has also been an increased demand for used vehicles, which are better supplied than new units due to pandemic-induced disruptions in new vehicle production, according to the report.
Sales of electric vehicles have also declined, down 41 percent year-over-year as a results of COVID-19, reduction in government incentives and the ongoing conflict between the federal government and the state of California over fuel economy standards.
The chartbook, authored by BBVA Research Principal Economist Marcial Nava, forecasts that sales could be affected in the long run by changes in consumer behavior resulting from the pandemic, including people relocating away from urban areas and the increasing rate of remote work among employees across the U.S.
Read the full auto sales chartbook here.