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Thursday, 27 August 2020 22:33

Luxury Vehicle Sales Expected to Rebound from Depression

Written by Kimberly Hurley, CBT News

Index

The coronavirus pandemic has not been beneficial to most industries, and this definitely includes the auto industry.

According to Cox Automotive, the Kelley Blue Book Brand Watch™ reported that for Q2 2020, luxury vehicle sales dropped 35% and hit their lowest level in the past two years.

 

The past couple of years had already seen a decline in luxury sales, with just 34% of consumers considering one, down from 39% in Q3 2018. There are various reasons for this, but for starters, lower-priced non-luxury vehicles are starting to be manufactured with technology previously only featured in luxury vehicles.

 

But the news isn’t grim. Luxury vehicle sales are expected to recover as the circumstances that caused the drop dissipate. 

 

One reason luxury brands were highly affected by the pandemic, according to Cox Automotive, is that New York City and Los Angeles are the two highest luxury markets in the country. Seeing as those cities have been plagued by coronavirus for months, it is no surprise demand sharply decreased and sales dropped.

 

The good news is as these areas recover in terms of economy and health, sales should too. Dealerships will be open for business, and healthy consumers who are open to shopping again will begin to do so.

 

Inventory levels have also been a struggle for luxury manufacturers due to the massive halt in supply chains that shut down factories for weeks or even months. As you might expect, the best-selling luxury vehicles are currently at the lowest inventory counts.


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