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Tuesday, 17 March 2020 21:28

ALG Provides Updated 2020 New Vehicle Sales Forecast Based on Projected Short-Term and Long-Term Impact of COVID-19

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ALG, a subsidiary of TrueCar, and the industry benchmark for determining the future resale value of a vehicle, is providing an updated 2020 new vehicle sales forecast to account for the quickly evolving Coronavirus pandemic and the latest economic outlook.

ALG projects that in a quick recovery scenario, where the economy and auto industry recover by the end of April 2020 back to levels prior to COVID-19 disruption, new vehicle sales will reach 16.4 million, down -500,000 vehicles, or -2.9% from ALG’s initial 2020 forecast and down -3.8% from 2019 sales.

 

In a scenario where COVID-19 is prolonged with a longer-term economic slowdown, ALG forecasts that new light vehicles sales will reach 14.5 million, down -2.4 million, or -14.2% from ALG’s initial 2020 forecast and down -14.9% from 2019 sales.

 

“In the rapidly moving, highly volatile global economic environment caused by the COVID-19 pandemic, we believe it’s prudent to provide a revised range of auto industry projections to new vehicle sales for 2020. The range is based on various scenarios provided by expert third party forecasts of macro-economic impacts from the Coronavirus outbreak,” said Eric Lyman, chief industry analyst for ALG.

 

“A quick recovery by the end of April would lead to roughly half a million lost sales, while a prolonged slow down through the end of the year would result in a nearly 15% year-over-year sales decline in 2020," Lyman said. "While forecasts are changing day to day, our current likely scenario has new vehicle sales for 2020 landing in the mid-15 million unit range.”

 

ALG is also reducing residual values in its latest Residual Value Book. This update is based off current third-party economic outlooks in COVID-19 impact and other key factors such as the stock market declines and drops in oil futures.


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