Shopping online, moving to EVs among new-car buyer pandemic trends

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The pandemic has affected everyone in both similar and very different ways. It’s been over a year of uncertainty for Canadians, with perhaps months more to come.

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The effects of the pandemic have been felt far and wide through the auto industry—and a year into the pandemic, automakers around the world are monitoring – and learning from – changing trends in the marketplace.

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New shoppers are arriving and loyal ones are changing habits. From one end of the country to the other, there are various ways that wildly-swinging uncertainty is impacting who buys cars, what they’re shopping for, and how.

Automotive News Canada has reported that car sales among some demographics actually increased during the pandemic. AutoTrader.ca has reported that shoppers are buying up more used cars, to avoid use of public transit. The Canadian Automobile Dealers Association (CADA) is optimistic about new car sales growth, which has benefited from greater demand as people move further from cities and do more driving.

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GuideAuto says brands like Cadillac and Buick suffered the smallest impact to overall sales during the pandemic. Our own Timothy Cain recently reported that brands like Kia, Ford, Ram and Subaru all increased market share in 2020, while brands like BMW, Honda and Nissan reported declines.

In February, Hyundai reported an increase in year-over-year sales during a period when the industry was heading in the other direction.

I talked to Ken Maisonville for more information about why that is, and what Hyundai Auto Canada is learning about the changing preferences of the new car shopper during these changing times.

At this writing, Hyundai is reporting a stronger-than-expected rebound of sales after a 44-percent year-over-year decline during the height of the pandemic. Last spring – in the height of selling season – sales had dropped sharply.

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Not long after, they rebounded – and faster than expected. Summer 2020 sales figures set all-time records for the brand, partly as a result of pent-up demand, low interest rates, and record-setting household wealth driven in part by rising real-estate values.

In Hyundai’s particular case, the rebound in growth was largely driven by newer-to-market utility models like the Venue, Kona and Palisade, as well as eco models like the Ioniq and Kona EV.

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Customer habits are changing, too. First, there’s more happening online than in the past — largely out of necessity. Hyundai says that more shoppers are going online for things like price negotiation, as well as learning about their vehicle after delivery.

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Though a small percentage of customers want to complete the entire sales process online, the trend is towards a customer who wants to do more online, but still holds the dealership experience as in important part of the process – especially for critical aspects like the test drive. Hyundai notes that this trend already existed pre-COVID-19, but that the pandemic is speeding it up.

Anecdotally, Maisonville says he’s seen more people value their personal transportation. This includes people who want their own vehicle so they don’t have to ride-share or use public transit, and shoppers seeking to reduce uncertainty in their daily lives by trading used vehicles in for new or newer ones.

On customer preferences, Hyundai says recent trends are largely still in effect: the car market is shrinking, CUVs and trucks are continuing to grow and dominate, newer models tend to sell better than older ones, and the subcompact SUV segment remains the fastest-growing in recent years.

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Compact SUVs like the Kona and Tucson are strong performers, and the eco market continues to grow as more offerings enter the market.

The electrified portion of this segment will heat up further in the coming years, with automakers around the globe entering new products into the mix. Hyundai already has two electric models in the marketplace, and a new ground-up EV called the IONIQ5 is on the way later this year. Hybrid and Plug-In Hybrid (PHEV) variants of the popular Hyundai Santa Fe and Tucson will hit the market soon, too.

“With [the] consumer shift to CUVs and combining this with eco options, we see huge potential in this area,” Maisonville adds.

Hyundai says they’re seeing a more serious customer than ever arrive at their dealerships after making an appointment. On the service side, they’ve learned that half their customers are comfortable with home pickup and drop-off, and/or contactless drop off and pick-up at stores. Some 20 per cent of these customers are even willing to pay for the service.

In tumultuous times, shoppers want less uncertainty — which is leading many to trade older cars in for new ones.

Following this trend, Hyundai even says they’re noticing more customers completing optional or recommended repairs on the service side, with an increase in interest in new batteries, tires, brakes, and the like.

More than ever, the Canadian motorist in 2021 wants to be absolutely sure they can rely on their car.