The shift away from public transportation also has increased demand for personal vehicles. In all, it’s probably a wash, said ALG’s data scientist Morgan Hansen. And before long, industry sales will recover and resume growth based on births, long lives and immigration.”The impacts from COVID are kind of canceling each other out,” Hansen said. “And we expect the market to normalize in the next years, to kind of get back to a normal, steady state.”
But one COVID-19 change is here to stay: digital retail. The in-store-only dealer “is probably going to suffer and struggle a little bit, without adding that extra layer on top,” Hansen said.
Looking at what gets sold, Hansen projects that the shift away from sedans and coupes has now “rightsized,” or fully adjusted. Where more substantial market segment changes will occur is in the rise of electric vehicles. ALG projects EV sales will double — although from a small baseline — over the next three years with the introduction of more and better choices.
“The electric segment is going to grow and evolve,” he said, “but it’s not necessarily going to be disrupting the kind of traditional [internal combustion engine] segments as of yet.”
