We all know that 2020 was a bit of a… crazy year. Between COVID-19, the election, and everything in between, it’s been a wild ride. With the pandemic affecting the automotive industry in unfavorable ways, everyone is looking towards 2021 to see what the new year will bring. In today’s blog, we’ll take a look at how 2020 was for the automotive industry and the trends and business progression that is expected to take place in 2021.
What happened:
April appeared to be the worst month for the automotive industry. To start off, there was an overall 43% drop in global sales for vehicle consumption. In TireReview’s research of 2020 and expectations for 2021, we saw a significant decline in employment and business confidence from automotive business owners in April. However, it improved and began to rise again in May and throughout the month of June. Additionally, industrial production and capacity utilization for automobiles and automobile components dropped immensely in April but also rose up in May once more. It was also expected that larger companies with multiple facilities were more likely to close their facilities for disinfection in the case that one of their employees tested positive for COVID-19. Moreover, over half of auto care organizations with more than 500 employees had to temporarily close one or more of their facilities. In comparison to this, only 16% of smaller companies with less than 500 employees faced facility closures.
What’s expected to happen:
Although there is a vaccine expected to come very soon and hopefully with it, a decrease in cases, auto industry managers and owners should be prepared for another wave of mileage decrease. In relation to this, there is also expected to be a decrease in automotive consumer spending within the aftermarket as well. While Statista reported a decrease in light vehicle sales growth of 17% in 2020, there is an 11% increase forecasted in 2021. Keeping this in mind, LMC Automotive estimates that 1.3 million units of the 2020 Toyota Corolla will be sold, making it the largest selling model in 2021. In terms of vehicle creation, there will be an increase in automobiles fitted with high-speed connections in order to promote safer driving. Finally, with an overall expected increase of 15% in 2021, the full-production volume of vehicles in the automotive industry is forecasted at 84.2 million units.
Digital Advertising:
A majority of consumers have been using mobile devices to conduct their shopping and this will only increase as we move into 2021. Based on this, having a responsive dealership website for your business is more important than ever. Shoppers are finding vehicle recommendations not only through Google searches but also on various social media platforms such as Facebook and YouTube as well. Our markets and vehicle departments will be heavily impacted by this so dealerships should plan to increase their online presence to try to reach more consumers. This idea is made even stronger based on the fact that consumers spent an average of 96 days in the automotive market in 2017, but that number has decreased to only 20 days in 2020. Additionally, with the rise of new social media platforms such as TikTok, dealerships would do well to implement new strategies such as live streaming and creating informative videos for automotive consumers.
What you can do:
The biggest action that employers and managers can take to prepare for the upcoming year is to learn to adapt quickly. Start positioning your dealership with PPP loans in the event your dealership does not meet the sales requirements it needs. It would also be helpful to reach out to your local representatives and find out what their plan is to aid your business if a second sales decreasing wave were to occur. Additionally, don’t forget about your main priority - your customers! Make your dealership stand out from your competitors by providing innovative and customer-focused solutions such as touchless service, no contact vehicle pickup and dropoff, and mobile services. In terms of actually interacting and garnering more leads, we have a few suggestions for that too. Based on a survey conducted by Linchpin dealerships should focus on inbound phone calls, creating appointments, and suggesting vehicle alternatives. It was found that over 70% of dealers fail to schedule appointments for customers, which means that your competitors are likely to be at fault for this. Make sure your sales team is following up with your customers and getting them into vehicles from your lot and not your competitors’.
While this may be a little overwhelming to take in all at once, don’t worry! AutoJini is here to help you get through it all and prepare for the upcoming year. Not only can we create a brand new, completely customized dealership website tailored to your needs, but we’ll also take care of your customer relationship and inventory management. We’ll make sure your dealership is prepared for the upcoming year and all the unexpected twists and turns to come. Get in touch with us today at 515-232-2024 or visit our contact page.