10 Takeaways from U.S. Auto Sales: Q3 2020 and COVID-19

If there’s one word to describe the U.S. automobile business, it might well be resilient. From a pretty awful Q2, when much of the industry was closed and sales volume had dropped by an alarming amount, auto sales came roaring back in Q3. Analysts across the country are remaking their forecasts – Cox Automotive analysts included – and auto dealers are feeling pretty confident about business moving forward. It was a good quarter, and we are hoping for more of the same as the final weeks of 2020 roll past.

Our team at Kelley Blue Book has dusted all their numbers and offers this snapshot report on auto sales in the U.S. during the third quarter of 2020. In it, you’ll find sales numbers by segment, maker and brand in Q3 and year to date. We dug through these numbers (and went a little deeper) and came up with these 10 Takeaways from Q3:

1. Q3 sales volume in total was only down 10% compared to year ago levels. In normal times, a 10% dip in auto sales is like falling off a cliff. But there is nothing normal about 2020 and down 10% was warmly welcomed. Remember, in Q2, the industry was down 34.1%.
   
2. For all the negative news swirling about, you might be surprised to hear that eight brands actually sold more in Q3 2020 than they did in Q3 2019. Two of the biggest gainers in Q3 were a bit of a surprise: We’re looking at you, Alfa Romeo and Chrysler. Alfa is hardly a big player on the U.S. stage, but its two core products, the Giulia sedan and Stelvio SUV, did well enough in a tough market. Chrysler, as well, is just a bit player, mostly a minivan company now. In Q3, Chrysler Pacifica sales were up 32.2%, driven in large part by the death of the Dodge Caravan. The minivan segment was off by more than 24%.
   
3. If Q3 2020 can be considered relatively strong for auto sales, then September will be considered the cherry on top of that sundae. Total vehicle sales in September were up 6.1% vs September 2019, thanks in part to two extra selling days in the month and a Labor Day weekend. Still, back in April, few analysts would have called for year-over-year gains by September.
   
4. “The Big 3” segments in Q3 2020 were Midsize SUV (661,027), Compact SUV (657,767) and Full-Size pickups (626,282). In total, they accounted for 50% of the total market.  
   
5. As new-car inventory issues continue to put pressure on the supply side of the equation, average transaction prices (ATP) continued to climb. In September, the ATP hit $38,973, the 3^rd highest monthly ATP in history according to Kelley Blue Book. The ATP was higher in April and June of this year, when volume was low and full-size pickups dominated. If current trends continue, we’re fast approaching the day when the average new car in the U.S. will cost more than $40,000.
   
6. The EV story in America continues to be Tesla’s story – a success story by many measures. But let’s not forget the Chevrolet Bolt, the small, relatively affordable EV that gives reason to believe EVs have a place in our future. Bolt sales were up 17.6% in the quarter and are up 7.2% year to date.
   
7. There’s an arcane theorem about automobile sales in the U.S.: The 30 top-selling vehicles in any given timeframe will account for approximately 50% of total sales. (And note, there are nearly 300 different vehicles for sale right now!) The theorem was absolutely true in Q3 2020. The top 30 sellers accounted for approximately 1.97 million sales. Total sales in Q3? 3.84 million.
   
8. Midsize SUVs was segment #1 in Q3. The KBB team clumps 26 excellent products into the segment, with many big players. Toyota Highlander was the top player in Q3; Ford Explorer is on top year to date. In fact, Ford has sold more Explorers this year than most luxury brands have sold vehicles in total. More than Audi. More than Buick, Cadillac or Lincoln. More than Tesla.
   
9. This is America, so we here’s your quick update on the full-size pickup wars. The fight continued in Q3, with Ram’s full-size pickup outpacing the Chevrolet Silverado by approximately 11,000 vehicles. Year to date through the end of September, Silverado (409,967) remains ahead of Ram (402,410).
   
10. Second place, however, is the best Chevrolet can hope for. The Ford F-Series will be king again. Through any storm, F-Series continues to be the #1 best-selling vehicle in America. Ford sold 221,647 full-size pickups in Q3; 589,034 year to date. Average transaction price? Well over $50,000. While nothing in life is certain, the F-Series on top is pretty darn close.

For more information, check out the Kelley Blue Book Quarterly Light-Vehicle Sales Report.