The Register Citizen (Torrington, CT)
New car sales accelerated in 2nd half of 2020
Automotive sales in Connecticut took a tumble in 2020, although not as much as expected given the overall impact the coronavirus pandemic has had on businesses in Connecticut and around the nation.
New car sales in the state declined by 11.6 percent in 2020 compared to 2019, according to data gathered by the Bostonbased automobile search website ISeeCars.com.
The beginning of 2020 looked promising for new car dealers in the state, with a 4.9 percent increase in January sales over 2019 and a 15.2 percent increase
in February over the year prior.
Then came the arrival of COVID-19 in March, with closures and restrictions bringing a drop in commuter and recreational travel. New car sales fell by 19.4 percent compared to the same period in 2019. And April was the cruelest month for new car sales in the state, with a 39.1 percent decrease over the same period in 2019.
“We did well considering all that happened,” said Eddy Cartegena, sales manager at Partyka Mazda in Hamden. “We were closed for a month and yet we finished the year at the same level we were at in 2019.”
Nationally, a strong fourth quarter at dealerships across America allowed overall sales to finish at 15 percent under last year’s numbers, said Jeff Aiosa, a member of the executive board of the Connecticut Automotive Retailers Association who represents Connecticut on the National Automotive Dealer Association board.
“Total sales were down 15 percent nationally, which was much better than had been originally anticipated,” said Aiosa, who also is president and owner of Mercedes-Benz of New London.
“I would think the Connecticut numbers were probably very close to what happened nationally,” he said. “The fourth-quarter numbers were a refreshing change, better than anyone anticipated.”
In terms of types of vehicles that were strong sellers, the Ford F series led the light truck category, he said. In terms of passenger cars, the Toyota Camry was the top seller, according to Aiosa.
“BMW, Lexus and MercedesBenz had the top three in sales volume nationally,” he said. Volvo was also a bright spot, with U.S. sales up by about 2 percent, according to Aiosa.
Karl Brauer, an executive analyst with ISeeCars.com, said luxury car sales did well because consumers saw it as “a way to combat the mental state that people were in because of the pandemic.”
“If you had the means, you probably brought something fun and extravagant,” Brauer said.
Production
Partyka has three dealerships in Hamden that sell Chevrolet and Izuzu vehicles in addition to Mazdas. Cartegena said the biggest impact COVID-19 had on the dealerships was a lack of inventory at the Chevrolet dealership.
“We’re short by about 150 cars in our inventory,” he said.
Chevrolet was negatively affected not only by the arrival of COVID-19 in the United States in March, but a monthlong strike by the United Autoworkers Union against General Motors that began in mid-September 2019.
Dowling Ford in Cheshire saw what Jack Bradshaw, the dealership’s general manager, referred to as “light inventory.”
“Ford did shut down some plants for the production of (personal protective equipment) during the beginning of the pandemic,” Bradshaw said. “We are anticipating levels to start getting back to normal around the end of the first quarter” of 2021.
Sarah Fryxell, president of the Connecticut Automotive Retailers Association, said inventories have been tight due to delays in manufacturers’ production schedules.
“Production dipped during the first few months of the pandemic but it has been steadily recovering and manufacturers are operating at pre-pandemic levels,” Fryxell said. Still, “inventory at the dealerships have not yet caught up to pre-pandemic levels.”
Mileage drops
Other factors have had an impact on the state’s new car and leasing market, she said.
“To accommodate consumers and to provide flexibility, several lease extensions have been granted.” Fryxell said. “For those driving less, low-mileage lease offers are available. Because miles driven are down overall, the number of leases has reduced along with that.”
Further, state Department of Motor Vehicles data shows the number of cars on the road on a daily basis in 2020 was down compared to 2019.
The DMV has more than twodozen permanent traffic counting locations across the state, including 14 in communities served by Hearst Connecticut Media. And since March, traffic levels at those locations have been off by anywhere between 20 percent to 80 percent, depending on day and location.
For example:
⏩ Traffic on March 29, 2020, at the Branford traffic counting location on Interstate 95 was off by 71 percent compared to the same day in 2019.
⏩ Traffic on May10, 2020, at the Norwalk traffic counting location on Interstate 95 was off by 38 percent compared to the same day in 2019.
⏩ Traffic on July 8, 2020, at the Wallingford traffic counting location on Interstate 91 was off by 26 percent compared to the same day in 2019.
As 2020 progressed, however, pre-pandemic traffic volumes at some of the counting stations returned to levels equal to where they were on the same day in 2019.
On Interstate 95 in Norwalk for example, that rebound began around the end of July. Traffic counts on Interstate 95 in Milford rebounded to pre-pandemic levels in early November.
Attracting customers
Despite the decline in driving and the slowdown in manufacturing, 2020 was a very good year for some automakers.
Kia Motors America announced earlier this month that it had achieved its highest annual retail sales ever last year. Kia sold 586,105 vehicles in the U.S. in 2020, with its light trucks, such as the Telluride and Sedona, accounting for 62 percent of the annual volume.
“In the face of the pandemic, Kia saw substantial growth this past year, outpacing the industry by a significant margin on our way to a historic retail sales performance by our dealer network,” said Bill Peffer, chief operating officer and executive vice president for Kia Motors America.
Connecticut new car dealers have tried a variety of incentives to lure customers back to showrooms, according to Fryxell, of the Connecticut Automotive Retailers Association.
“In response to the economic impact of the pandemic, consumers have been offered no payments down, no interest rates or very low ones, deferred payments for three to four months, along with discounts for first responders and health care workers,” she said.
Cartegena, the sales manager at Partyka Mazda in Hamden, said zero-interest loans led to a surge of activity at his dealership, as did the issuance of the first round of $1,200 stimulus checks, which some people used for down payments.
“We hadn’t seen zero-interest rates since 2017,” he said.
But making the decision to purchase a new car in the midst of a pandemic varied from buyer to buyer.
Tegan Abear was in the market for a new Toyota Tacoma. Abear lives in the Berkshires, but came to Connecticut to buy his new car from Torrington Toyota.
“We have been unhappy with the service of our local dealer,” he said. “They (Torrington Toyota) were attentive, yet not pushy. I had settled on the vehicle, I just needed a dealership who wanted me as a customer.”
Amy Walsh of Wallingford bought a new Subaru Crosstrek in December even though she acknowledged she is driving much less than before. She traded in a 2008 Toyota Sienna that had 190,000 miles.
“My kids are older and the backseat is much tighter than my minivan, but why buy a car sized for the few times a year you’ll need a big car?” Walsh said. “I figure it was better to size it for my daily driving. I really like the Subaru styling and brand reliability, and I think the styling on the new Toyotas is too aggressivelooking.”
Walsh said because she and her husband had kept the Toyota Sienna for so long, we “had saved and planned to buy a new car at some point soon.”
“I feel way more comfortable having bought a smaller, less expensive car than a $40,000 or more car,” she said.
Others who have purchased cars during the pandemic did so out of necessity.
Steve Kalb of Cheshire purchased a 2019 Volvo S60 from Volvo of Watertown that had been used for test drives.
“I was much more concerned that I might have to do major work on the old car and wanted to get ahead of that,” Kalb said.
The emphasis on buying cars online because of COVID-19 protocols was another factor in boosting car sales, ISeeCars.com analyst Brauer said.
“The capability to do it has existed a couple of years ago, but the dealers didn’t like it initially and neither did consumers,” he said. “But all of a sudden, if you wanted to buy a car and social distance, this was the best way to do it.”
Another factor that led to the surge in car sales during the second half of 2020 was that “people’s concern long-term that there was going to be huge economic hit subsided somewhat,” Brauer said.
Finally, he said, the “desire to not use shared or public transportation was huge.”
“So was people moving out of the cities to the suburbs, where there typically isn’t any public transportation,” Brauer said. “That means there’s a fairly substantial contingent of new car buyers that didn’t exist a year or two ago.”
The road ahead
The best could be yet to come for Connecticut car dealers and consumers. December, January and February traditionally is the most difficult time for new car dealers to move their product, according to Brauer.
“So to get people into showrooms during those months, dealers have to work harder,” he said. “And that translates into lower prices for consumers.”
Bradshaw, of Cheshire’s Dowling Ford, said zero-percent financing along with aggressive rebates offered by Ford have created a business climate in which potential car buyers can no longer sit on the sidelines.
“I would say our customers are more inclined to take advantage of long-term financing at very low interest rates,” he said when asked about whether customers are choosing to lease a car rather than purchase a new one.