George Augustaitis

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Bio: Director of Automotive Industry and Economic Analysis

Posts by George Augustaitis

Pickup trucks dominate new vehicle searches in 2020 so far

Posted by George Augustaitis on July 2, 2020

Since the last week of March, most people in America (if not the world) have seen their life change in some way, shape, or form because of COVID. One such change has been consumer’s driving habits. For many, the daily commute has been eliminated along with frequent trips to the store, gym, school, childcare facility, etc. While many, if not most, will eventually return to their previous driving habits, the current decrease in driving and increase in staying home has the potential to impact shopping activity. In particular, I wondered about how such a significant shift in consumer behavior might be influencing shoppers’ search behavior for vehicles.

To answer this question, I looked at new vehicle search volume on CarGurus for the first half of 2020 and compared it to the search volume we saw for the same criteria in 2019.

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Topics: car searches, CarGurus data, covid-19

Automotive market poised for a unique, state-by-state recovery

Posted by George Augustaitis on June 26, 2020

In the US, the automotive market’s recovery from COVID-19 will be as unique as the recession it spurred—and it will vary by state. The main reason for this is that consumer demand is highly affected by the increase or decline of COVID-19 cases in a particular state. Areas where the wave of infections came early saw a steep pullback in leads in late March and early April but have since started to recover. In contrast, states where cases of the virus are just now peaking are seeing leads decline rapidly and are at, if not below, early-February levels.

In this article, I’ll look specifically at two states, New York and Texas, and how COVID-19 has impacted each market.

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Topics: covid-19, economic analysis, new york, recovery, texas

New and used vehicle inventory drying up due to COVID-19

Posted by George Augustaitis on June 18, 2020

As dealerships were forced to shut down their showrooms, auction lanes closed, jobless claims peaked, and car sales fell off a cliff in April, the industry was laser-focused on consumer demand. Fortunately, May brought incentives, stimulus checks, and pent-up demand, which drove consumers back to dealership lots. However, because inventory has not been replenished, the industry’s problem has shifted from demand to supply.

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Topics: covid-19, inventory acquisition, inventory sourcing, new cars, used cars

WATCH: Unpacking the COVID-19 recession and its impact on the auto industry

Posted by George Augustaitis on June 11, 2020

The COVID-19 pandemic has had a sweeping impact on the economy. Almost overnight, it brought businesses across the country to a near halt, resulting in a record number of jobless claims and a recession unlike any other.

In this presentation, I’ll take a look at many of the unique factors—decreased consumer confidence, supply chain disruption, and increasing pent-up demand—that continue to make this COVID-19-driven economic downturn so unique. I’ll also cover how the recession continues to evolve and what it means for the auto industry.

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Topics: covid-19, economic analysis, industry insights

5 Tailwinds that propelled vehicle sales in May explained

Posted by George Augustaitis on June 5, 2020

Not only were vehicle sales in May up from April, they were better than expected—a welcome surprise for the automotive sector. The increased sales numbers came after COVID-19 caused dealership closures, a shift to online sales and appointments, declining confidence in job security, and one of the largest stimulus programs in the history of the US. And while many view these sales results as a leading indicator of growth in the sector, the better-than-expected sales numbers were more likely a result of pent-up demand and market tailwinds.

Below, I’ll dive into the five tailwinds propelling sales numbers the most.

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Topics: covid-19, industry analysis, sales

Electric vehicle demand slower to recover than other segments

Posted by George Augustaitis on June 1, 2020

cargurus-indexed-us-lead-volume-chart

Pent-up demand, stimulus checks, and the hope that we are past wave one of COVID-19 has spurred the recovery of US leads on CarGurus. Total lead volume is now above early-February levels.

However, not every sector of the vehicle market has seen the same recovery. For example, we know that demand for higher-priced vehicles has returned quicker than lower-priced vehicles, but each vehicle segment has behaved differently. Most notably, the electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) segments.

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Topics: CarGurus data, covid-19, electric vehicles, EVs

Will limited credit availability slow car sales this summer?

Posted by George Augustaitis on May 21, 2020

As states begin to reopen and CarGurus leads trend upward again, it seems we might be through the trough. These signs indicate that the US might soon emerge from the worst of the COVID-19 pandemic. However, we must be cautiously optimistic because it’s unlikely that the unemployment rate has reached its peak or that we are fully in recovery mode. And for the auto industry, there is an additional headwind on the horizon: credit availability.

While demand for vehicles is growing—US lead volume on CarGurus has nearly returned to the same level as February—the sales bounce back in the auto market may be tempered by the availability of credit.

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Topics: covid-19, credit, economic analysis, financing

Uptick in U.S. leads across all vehicle price ranges points to start of recovery

Posted by George Augustaitis on May 15, 2020

While I personally think we’re weeks, if not months, away from knowing exactly how long the economy will take to fully rebound, consumers are coming back—and they’re submitting leads. In fact, U.S. leads* on CarGurus are almost at the same level they were at the start of February. Yes, February generally represents a smaller share of units sold than March and April, but the fact that consumer interest is trending up this early is a positive sign.

cargurus-total-indexed-leads-us-chart

While total U.S. lead volume on CarGurus has nearly returned to the same level as February, lead volume varies by price bucket, and I’ll dig deeper into this below.

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Topics: CarGurus data, covid-19, economic analysis

Why 2020 is an automotive year unlike any other

Posted by George Augustaitis on May 8, 2020

New vehicle sales seasonality has always been rather predictable. The end of the fiscal year, the model year changeover, Labor Day, and the end of the year have always led to stronger months in March, May, August/September, and December.

YoY-new-vehicle-sales-seasonality-graph

However, during recessions, seasonality trends break from their normal patterns—and this year is no exception. While we know the patterns will be different due to COVID-19, the variation is difficult to predict. That’s because the prolonged impact of the pandemic, which has led to stay-at-home orders, record jobless claims, declining consumer confidence, delayed tax returns, usage of stimulus checks, and increased OEM incentive spend is still relatively unknown. This makes 2020 unlike any other.

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Topics: covid-19, seasonality, trends

Declining consumer confidence delaying — but not stopping — car purchases

Posted by George Augustaitis on April 27, 2020

Before the global outbreak of COVID-19, consumer sentiment (as measured by the University of Michigan) in the US was trending upward. Last Friday, reporting for the final full week of April showed a drop of 17.3 points to 71.8. This is the largest monthly decline ever recorded. Buying Conditions declined across large durables with car buying intentions falling to lows last recorded in 2011 and home-buying intentions at their lowest since 1983.

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Topics: consumer sentiment, covid-19