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Coronavirus drives auto sales online

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COVID-19 Impact & Recovery: Investment Banking

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COVID-19 Impact & Recovery: U.S. Utilities and Power


Coronavirus drives auto sales online

The closure of car dealerships due to the coronavirus pandemic forced automakers to become more creative in how they sell their wares, and there are indications that this trend could endure beyond the disease.

Tesla has sold cars directly to consumers via its website for several years, and many of its rivals have accelerated similar efforts in recent months. Ford, General Motors and Fiat Chrysler are bound by U.S. franchise laws to sell through dealers, but they have introduced click-and-collect options, enhanced online showrooms and other measures to allow customers to complete more of the buying experience from behind their screens. In the U.K., Peugeot, Volvo Cars and others offer fully online sales with delivery of new, customized vehicles to customers' doorsteps.

Franchise laws will ensure that there will remain a need for dealerships, but all major carmakers are evolving their purchase options for the next generation of buyers. Alexei Andreev, managing director at venture capital firm Autotech Ventures, notes that younger customers are more likely to avoid visiting showrooms until they are ready for a final test drive.

If the June 9 IPO of used-vehicle online retailer Vroom is anything to go by, a growing online-element of car sales is expected to continue — the New-York-based company's stock has more than doubled since it debuted.

Consumer Edge is a weekly collection of critical developments across the automotive; retail; and food, beverage, and tobacco industries. Click here to subscribe.

Chart of the week: US consumer uncertainty surges

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Automotive

US automakers accelerate online selling options during COVID-19 pandemic

However, dealerships will still remain a key piece of online retail for carmakers, experts said.

As Hertz gains OK to sell more stock, equity value looks uncertain

Hertz won bankruptcy court authority to sell up to $1 billion in new stock even though it is facing delisting action.

GM CEO sees no additional coronavirus-related cost cuts as recovery starts

The head of the Detroit automaker said the company is well-positioned after previous cost-cutting measures.

Securitization filing shows early Q2 surge in auto lender's production

The aggregate principal balance of loans originated by Ford's captive finance subsidiary soared by 83.3% on a year-over-year basis in April as the popularity of certain COVID-19 incentive programs more than offset pressure on new vehicle sales.

Retail

Unprecedented consumer collapse stokes fears for future of US economy

The U.S. personal saving rate in April was four times as high as it was in 2019 as consumer spending dropped $1.89 trillion in a month. Economists see a bottom, but the biggest driver of the U.S. economy may be forever changed.

June retail market: US sales rebound in May; 6 retailers go bankrupt

U.S. retail sales staged a rebound in May with a record 17.7% jump.

Amid racism protests, companies take to social media to disclose diversity

Activist investors have long pressed companies to disclose diversity information, with limited success. Now, some companies are responding to a social media campaign urging them to report the number of Black employees in their organizations.

As stores reopen, US retailers retool their workforces in coronavirus era

Retailers are likely to focus hiring on strengthening store fulfillment capabilities as well as experiences such as curbside pickup and returns, experts say.

Default odds fall for apparel, department stores amid reopenings, bankruptcies

The short-term outlook for the sector does appear brighter, with stores reopening, retail sales rebounding and market share up for grabs as some chains close stores.

Hong Kong listing boosts JD.com's coffers as competition intensifies

The Chinese e-commerce company's move also asserts Hong Kong's significance as a financial hub despite the ongoing political unrest.

JD.com, Alibaba rake in $137B in China's 1st major shopping event post-COVID-19

The strong results of the 618 shopping festival indicate that online sales in the country are gradually recovering despite a sluggish overall retail environment.

Food, beverage and tobacco

Dining out: US restaurant sales, jobs gain in May but lag pre-pandemic levels

The pain of the U.S. restaurant industry eased a bit in May as eateries began reopening their doors at limited capacities.

Online grocery growth softens as COVID-19 restrictions ease

Usage of delivery and pickup services ballooned as consumers stayed at home. Now experts are trying to figure out how much of the growth is sustainable.

Beer brewers brace for grim Q2 even as bars, restaurants reopen

Researcher GlobalData forecasts that global beer sales are expected to decline 8.2% to $575.5 billion in 2020 as brewers large and small attempt to mitigate the disruption caused by the coronavirus pandemic.

McDonald's sees expansion potential in COVID-19 restaurant closures

Executives for the restaurant chain detailed June 16 the different ways the pandemic is shaping their operations, including the potential to widen their footprint.

S&P 500 Consumer Staples and Discretionary indexes

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