As two of car dealers' primary revenue streams, car sales and collision repairs dried up during the COVID-induced recession. Online parts and accessory sales have dramatically increased, providing dealers a new outlet for additional revenue. In this blog, we’ll take a look at how much the automotive industry has shifted in the last three months and the record numbers the online part and accessory market has seen.
In the long 2 months from March 2nd to May 3rd, new and used sales dropped 1.5 million units. That’s a total loss of $41 billion in revenue and $2.6 billion in profit for dealers. Those who were in the industry during the last recession are experiencing a bit of deja vu as Edmunds estimated that overall sales fell a total of 34.3% through the second quarter. FCA saw a 39% decrease in US sales while GM saw a 34% decline.
While dealerships could historically fall back on the service department to fix absorption rates during a recession, social distancing guidelines and fear of spreading the virus has caused customers to stay home. Consumers have prioritized essential repair work over maintenance, and with fewer cars on the road, the collision rates have dropped. In March alone, service requests dropped 56% when compared to the previous year.
Dealers using the RevolutionParts platform to sell parts online reported that, for a lot of them, the automotive aftermarket has been the only upside during this whole pandemic. Even though people aren’t purchasing cars or coming in for routine maintenance, they’re doing what they can from home to keep their cars running. Garages and driveways have turned out to be great places for DIYers and those willing to learn how to change a filter to stay socially distanced.
The automotive parts and accessories market is typically recession-resistant — and it’s standing strong against COVID-19!
While online dealers saw a drop in their part and accessory sales around the time states mandated lockdowns and business shut their doors, it wasn’t long before daily part sales skyrocketed. After stimulus checks and tax returns kicked in, part and accessory sales picked back up and surpassed the norm. Since May, daily sales have increased by 35% on average.
The coronavirus has forced the automotive industry to face new challenges in vehicle sales, fixed operations, customer behavior, and economic outlook. RevolutionParts has collected data from trusted partners and internal stats to lay out the automotive trends brought on by COVID-19. Download these insights to help your business adapt to the new landscape.