The automotive industry hit a historic low in sales in this year’s second quarter. With a 40% drop in year-over-year sales, it’s understandable why dealers felt discouraged.
But we’re thrilled to share some light at the end of the tunnel: The data we’re seeing indicates this quarter may be an unprecedented restart to recovery.
We’re confident recovery is already underway due to new markets emerging and digital engagement maintaining an all-time high.
These new emerging market predictions include Millennials who used to rely on ridesharing or scooters, but now are looking to buy a second vehicle. With safety and hygiene top of mind, families that only owned one car will now be in the market for a second car.
According Dealer Inspire, “Out of the 16% of consumers nationwide who stated they primarily rely on public transportation and ridesharing, the vast majority said they will now start to rely on personal transportation.”
While the data gives way to a hopeful recovery, these predictions ultimately suggest dealers will need to prepare to engage with these markets. What worked pre-COVID-19 will not be fully sufficient in a post-COVID era.
Instead, it will be critical for dealerships to intelligently identify, target and engage online shoppers. Today dealers adopting the right technologies can make the difference between thriving or languishing in the new market reality.
As showrooms reopened in May and June, our anecdotal reporting indicated that dealers were surprised by the rebound of showroom traffic. According to the Lotlinx market index, shopper engagement in Georgia went up nearly 47% with sales volume up 24% in the past month alone.
Similarly, shopper engagement in Colorado rose about 23% with sales increasing 40.8% in June. Clearly shoppers are re-engaged and show promising interest in car purchase even amidst the current climate. With these leading indicators we see great potential now.
Due to the shift in consumer behavior, digital engagement, including overall website traffic and website leads, remained relatively strong for dealers. This led to a steady increase in Google and Bing spend throughout the month of June as well, bringing us into Q3 with momentum.
“People are desperate for a reason to get out of their houses and go somewhere. And even if they’re in their cars, there’s a chance to be a part of something communal,” says Jim Galloway from the Atlanta Journal Constitution.
Data seem to back that observation. (Ilana Shabtay, left)
Looking ahead, it's clear dealers will be given a unique opportunity to capitalize on this traffic. If they implement the right automation tools and solutions to identify and segment new buyers, they will reduce high marketing fees and will be a material driver of automotive’s growth and recovery through the next two quarters.