When looking at automotive remarketing data from March through May 2020, the COVID-19 pandemic completely changed what typical industry trends would have normally occurred around this time of the year.
Declines in vehicles sold at auction started to show during the week of March 8, a few days before the coronavirus was declared a pandemic on March 11.
There was an even more significant drop off on March 15, and later hit its lowest during the week of March 29.
“Both the uncertainty and fear around the virus itself in addition to the shelter-in-place orders which varied by state drove the retail sales rate way down which then hit the wholesale markets almost immediately,” said Joe Miller, VP, client experience for AutoIMS.
However, the industry quickly turned to online services, utilizing digital-only sales, which ultimately kept the industry from halting completely.
“The auctions adapted quickly doing everything they could to offer digital-only sales, and demand started to pick up quickly. Reduced staffs, a lack of in-person/physical auctions, and continued slower retail sales pace continued to hold back the wholesale pace as well; but that’s bouncing back quickly as things open back up, physical auctions begin to run again, and it starts to feel like a more normal environment.”
Miller noted that in the low part of the slump, which occurred around the end of March and beginning of April, attention in the industry turned to lower-end inventory temporarily.
“There was also a major slow-down in the ability for captive finance companies to end lease terms, which are usually late model, high-value vehicles). So, the inventory mix turned lower in value,” he said. “Now, with operations opening back up, and a perception that the economy might turn around, we see that shift going back to a more normal mix as higher-end retail buyers come back to the table.”