July 28, 2020 COVID-19 AUTO MARKET UPDATE€¦ · Source: 2020 Cox Automotive COVID-19 Consumer...
Transcript of July 28, 2020 COVID-19 AUTO MARKET UPDATE€¦ · Source: 2020 Cox Automotive COVID-19 Consumer...
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July 28, 2020
COVID-19 AUTOMARKET UPDATE
Jonathan SmokeChief Economist, Cox Automotive
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COVID-19 LOCAL IMPACT ASSESSMENT
Source: Cox Automotive
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CONTINUING CLAIMS AT 16.2 MILLION NATIONALLY
Source: Department of Labor
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CONSUMER SENTIMENT DOWN AGAIN LAST WEEKMorning Consult’s Index of Consumer Sentiment on Monday was down 24.2% since February 29
Source: Morning Consult
114.23113.8
81.23
85.87
60
70
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90
100
110
120
1/1/20
1/8/20
1/15/20
1/22/20
1/29/20
2/5/20
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7/22/20
ICS Value (7-Day Average)
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CONSUMER SENTIMENT VARIES ACROSS MAJOR MARKETS
Since February 29th Since July 20th
Source: Morning Consult
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Consumers remain on edge with new challenges popping up every week
Consumer Level of Concern
16% 8% 13%
28%21% 23%
57%71% 65%
Early Outbreak(March)
Shelter in Place(Late March-April)
Reopening(May-Mid June)
Not very/Not at all Somewhat Extremely/Very
Source: 2020 Cox Automotive COVID-19 Consumer Impact Study
Q9. How concerned are you about the coronavirus overall?Q27a6. Will having virtual/at-home learning for your child(ren) impact your or your spouse’s employment situation?
6
12% 9% 11%
20% 20% 19%
68% 70% 70%
June26-27
July10-11
July24-25
↑
↑↑
↑
↑
43%of households with children entering virtual learning expect to see it impact their employment
From: Wave 15 Survey: July 24-25
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7Source: 2020 Cox Automotive COVID-19 Consumer Impact Study
The number of in-market shoppers has dropped by ¼ since the start of COVID-19
% OF CONSUMERS IN-MARKET TO PURCHASE A VEHICLE WITHIN THE NEXT 6 MONTHS
Early Outbreak(March)
20%Shelter in Place
(Late March - April)
20%Reopening
(May – Mid June)
17%
15%(July 24-25)
Q4. Now as of today, when do you think you will be in the market to purchase or lease a vehicle?
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17%
34% 33% 29% 29% 29%
EarlyOutbreak(March)
Shelter inPlace (Late
March-April)
Reopening(May-Mid
June)
June26-27
July10-11
July24-25
Source: 2020 Cox Automotive COVID-19 Consumer Impact Study 8
Uncertainty plagues over half of those delaying their purchase
Delaying Vehicle Purchase/Lease*
*Among 6-month auto intendersQ10. Have you done, or do you think you will do any of the following because of the coronavirus? *Note: Added “have done” in Wave 4 Q4aa. How would you complete the following sentence? “Right now is a ______ time to buy a vehicle?” (Options: perfect, smart, scary, stupid, pointless, other)
Factors At Work• Spike in COVID-19 cases• Uncertain financial stability• Fewer miles traveled• Civil unrest• General uncertainty in the market
From: Wave 15 Survey: July 24-25
55%of those delaying a vehicle purchase call this an “uncertain” time to buy a vehicle
38%of shoppers not delaying a vehicle purchase still call this a “good” time to buy a vehicle
↑
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RETAIL SALES RECOVERY ESTIMATES
Source: Cox Automotive
-16.6%
-17.1%
21.3%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
1/8/20
20
1/15/2
020
1/22/2
020
1/29/2
020
2/5/20
20
2/12/2
020
2/19/2
020
2/26/2
020
3/4/20
20
3/11/2
020
3/18/2
020
3/25/2
020
4/1/20
20
4/8/20
20
4/15/2
020
4/22/2
020
4/29/2
020
5/6/20
20
5/13/2
020
5/20/2
020
5/27/2
020
6/3/20
20
6/10/2
020
6/17/2
020
6/24/2
020
7/1/20
20
7/8/20
20
7/15/2
020
7/22/2
020
Y/Y % Change in 7-Day Moving Average of Retail Sales
New Used
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ZERO PERCENT FINANCING DECREASES
Source: Cox Automotive
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Jan-
17
Feb-
17
Mar
-17
Apr-
17
May
-17
Jun-
17
Jul-1
7
Aug-
17
Sep-
17
Oct
-17
Nov
-17
Dec
-17
Jan-
18
Feb-
18
Mar
-18
Apr-
18
May
-18
Jun-
18
Jul-1
8
Aug-
18
Sep-
18
Oct
-18
Nov
-18
Dec
-18
Jan-
19
Feb-
19
Mar
-19
Apr-
19
May
-19
Jun-
19
Jul-1
9
Aug-
19
Sep-
19
Oct
-19
Nov
-19
Dec
-19
Jan-
20
Feb-
20
Mar
-20
Apr-
20
May
-20
Jun-
20
Jul-2
0
0% APR Finance Share
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NEW SALES HAMPERED BY SUPPLY
Source: Cox Automotive
2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
3,000,000
3,200,000
3,400,000
3,600,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
Active New Vehicle Inventory by Week
2019 Active Inventory 2020 Active Inventory
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USED INVENTORY DOWN
Source: Cox Automotive
0.0 Days
20.0 Days
40.0 Days
60.0 Days
80.0 Days
100.0 Days
120.0 Days
140.0 Days
160.0 Days
02/0
1/20
02/0
5/20
02/0
9/20
02/1
3/20
02/1
7/20
02/2
1/20
02/2
5/20
02/2
9/20
03/0
4/20
03/0
8/20
03/1
2/20
03/1
6/20
03/2
0/20
03/2
4/20
03/2
8/20
04/0
1/20
04/0
5/20
04/0
9/20
04/1
3/20
04/1
7/20
04/2
1/20
04/2
5/20
04/2
9/20
05/0
3/20
05/0
7/20
05/1
1/20
05/1
5/20
05/1
9/20
05/2
3/20
05/2
7/20
05/3
1/20
06/0
4/20
06/0
8/20
06/1
2/20
06/1
6/20
06/2
0/20
06/2
4/20
06/2
8/20
07/0
2/20
07/0
6/20
07/1
0/20
07/1
4/20
07/1
8/20
07/2
2/20
07/2
6/20
Inve
ntor
y Da
ys' S
uppl
y
Days Supply Wholesale Inventory and Retail Inventory
Rolling 7 Day Supply Retail Rolling 7 day Supply Wholesale
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USED PRICES AT NEW HIGH POINTS
Source: Cox Automotive
80%
85%
90%
95%
100%
105%
110%
115%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
MY 2017 Retail and Wholesale Price Indices (wk1=100)
2019 Retail Index 2020 Retail Index 2019 Wholesale Index 2020 Wholesale Index
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SALES IMPACT VARIES BY DMA AS EVIDENCED BY UNIQUE CREDIT APPS
April 5th July 26th
Source: Cox Automotive
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COX AUTOMOTIVE LEADING INDICATORS
• Leads on Autotrader were up 52% y/y in July through Saturday and on Kelley Blue Book up 27%; both are strong but losing some momentum
• Dealer.com continues to see both New and Used Vehicle Form Submissions outperform, and used lost momentum over the weekend
• Dealertrack unique credit applications on same-store basis were down 11% y/y last week, which was a declining trend from the prior week
• Xtime saw a 15% decrease y/y last week in consumers having their cars serviced, which was a slight decline from the prior week
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