Consumer Preferences Shifting Amid COVID-19 Pandemic

The automotive industry is still shaking off the effects of the COVID-19 pandemic of 2020. Production shutdowns, stalled sales, business restrictions and an overall reduction in registrations turned the industry upside down.

And while the industry has bounced back, we observed consumer preferences shifting month to month, creating a new environment for dealers, manufacturers and consumers alike. With last year officially behind us, let’s see how the industry fared.

Dramatic Shifts in New Registrations

Overall, new-vehicle registrations were hit the hardest. They saw a decline from 16.8 million in 2019 to 14.2 million in 2020, a 15.5% decline year-over-year. In fact, during the month of April, new registrations for light-duty vehicles dropped roughly 760,000, an 11-year low.

But used vehicles were impacted as well. Used-vehicle registrations dropped from 42.5 million in 2019, to 39.3 million in 2020, a decrease of 7.5%. 

Over the course of the year, there was a lot of conversation about what a recovery would look like and when it would occur. The data shows that, while the automotive industry seemed to rebound more quickly than others, it still continued to feel the effects of the pandemic.  

New registrations for light-duty vehicles reached a fairly normal 1.35 million in August. But volumes continued to fluctuate for the rest of the year, with one notable example being the month of  December, which saw 1.3 million new registrations, a decrease from 1.42 million in 2019.

With over a year since the pandemic first upended the industry, we are still seeing the effects of COVID-19. With this in mind, it will be important to keep a close eye on registration trends as we move forward to help inform sales trends and business strategies.

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Throughout the year, we also saw shifts in new-vehicle registrations by brand. In 2020, Toyota became the light-duty leader, making up 12.73% of new-vehicle registrations, surpassing Ford, which made up 12.66% of new vehicles registered in 2020. This was a reversal from the previous year, which saw Ford leading with 12.92% of new vehicles registered and Toyota second with 12.53% that same year. Rounding out the top five brands are Chevrolet (11.85%), Honda (8.38%) and Nissan (5.74%).

CUVs Continue to Grow in Popularity

The popularity of crossover utility vehicles continued to grow in 2020. CUVs experienced a 1.2% growth year-over-year, making up 19.4% of all vehicles in operation in 2020 compared to 18.2% in 2019. Meanwhile, pickup trucks maintained their lead, growing from 20.2% in 2019 to 20.4% in 2020. Midsize cars held the second spot, making up 20.2% of vehicles in operation while truck-based SUVs grew, increasing from 12.6% from 2019 to 13.3% in 2020.

Millennials and Gen Z Make Up Largest Vehicle Buying Cohort

Historically, it’s been believed that Millennials and Gen Z consumers have less interest in purchasing vehicles. However, the data says otherwise. In Q4 2020, Millennial and Gen Z consumers were the only generational segments experiencing and maintaining growth.

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Gen X was the only other consumer segment to experience growth, albeit small, from 29.7% to 29.9%.

The challenges of the past year tested the strength and resiliency of the industry. But while initially hit hard by the effects of COVID-19, the automotive industry is recovering.

As the dust begins to settle and recovery continues, it will be crucial to stay close to the trends and proactively respond to shifts as they happen. In doing so, the industry can continue to confidently navigate the road to recovery.

Marty Miller (pictured above, left) is Experian’s senior automotive industry consultant.