5 Automotive Industry Trends Impacted by COVID-19

For more information on the novel coronavirus and COVID-19, visit cdc.gov.

This analysis was last updated on 27th March 2020.

Towards the end of 2019, many automotive experts and analysts shared their take on the trends moving the industry forward.

While many of those trends still apply, the recent COVID-19 outbreak has made an impact on the industry as a whole.

In this analysis, we take a look at emerging data and the short- and long-term impact the crisis will have on the automotive industry.

How COVID-19 Will Shape The Automotive Industry

It’s clear that the COVID-19 outbreak is having a dramatic, short-term effect on the automotive industry. Social distancing and self-isolation has lead to fewer people using and investing in cars – and for good reason.

The big question is; how will things be affected in the long-term after the crisis is over? Dealerships have already seen a dent in sales volume as consumers are forced to stay home and manufacturers are temporarily shut down.

According to a recent study by Dealer Inspire, there has been a -10.61% decline in active shoppers across their properties (as of 25th March 2020). Furthermore, there has only been a -7.9% decrease in website traffic.

However, while this may seem like a negligible impact on traffic volume – especially considering the situation – the behavior of these users has shifted toward product research over purchasing intent.

As outlined by Dealer Inspire, this indicates that, while there is still demand in the market, it’s unlikely consumers will make a purchase in the “immediate future.”

The biggest takeaway from this? There’s light at the end of the tunnel. Yes, sacrifices are being made, and times are uncertain. But if we can weather the storm, there’s a market waiting to be served once the health crisis is over.

So, what can we do in the meantime? Are there ways to use this time to set ourselves up for success – no matter the new reality that awaits us?

We’ve seen several brands lay down the foundations for future success, while building strong customer relationships as it happens. Here are a few lessons that you should consider applying to your business:

  1. Shift your focus from sales to branding: Traditional sales activity may come across as “tone-deaf” during this time. Instead, ads and marketing activity that focuses on serving the customer is making the biggest impact. Now more than ever, content is king. How can you help your customers and local communities get through the crisis?
  2. Offer services to key workers: For example, in the UK, the government made a call for 250,000 volunteers to assist the national health service for various duties, including delivery of goods and patients. Can you provide your inventory to those who need it most?
  3. Adapt your business model: Consumer behavior is shifting dramatically. Can you find new ways to adapt? For example, as brick-and-mortar businesses pivot to a delivery model, a new (albeit temporary) market for automotive goods and services are emerging.
  4. Play the long game: As demonstrated by the data provided by Dealer Inspire, behavior is shifting to research and top-of-funnel activity. Can you pivot your marketing strategy to match this intent?

Throughout the rest of this article, we’ll address these solutions in more depth, along with an analysis of how stable and emerging trends alike have been impacted by the outbreak. We’ll take an objective look at the impact made, while providing practical and useful content.

1. Prioritization of Digital Retailing

Implementing a digital retailing strategy allows automotive brands to emulate the deal creation process through digital platforms. This empowers consumers to find the right car and feature combinations before visiting a dealership.

What it isn’t, however, is a complete solution for the entire sales cycle. Unlike traditional eCommerce models, the complexity of car sales means human-to-human touch-points are generally required to close a deal. (Some of the more hardcore advocates of digital retailing may disagree!)

To clarify, the overall benefits of providing digital retailing include:

  • A personalized customer journey: The shopping experience becomes tailored to every buyer and their needs. It’s like having a digital sales rep for every website visitor.
  • Bridge the gap between digital and physical sales: 80% of consumers want to complete several steps in the sales process online, and 90% want to sign papers in-person. A digital experience not only delights, but satisfies customer needs and behavior.

Many dealers have been wary of adopting this technology, citing a loss of control over the customer journey as one of the main reasons. However, now more than ever is the time to adopt a digital retailing experience.

Even as things return to normal after the COVID-19 outbreak has passed, it’s likely that a shift in consumer behavior will emerge. Especially as a result of the forced change in our way of life.

It may be fair to suggest that consumers are “suspended” in the research phase of the customer journey. But this is a huge opportunity for brands to build awareness and provide an experience consumers are looking for. When consumers are ready to buy again, they’ll have a tailored deal ready to sign for.

2. Pivot Your Ad Creative

If you’re still using the same creative and messaging in your ad campaigns as you did before the outbreak, now is the time to adapt to the new reality.

Relying on traditional offers – such as low rates on financing for a limited time – will not only be ineffective, but is likely to hurt your brand image. If you are going to make such offers, you may wish to consider 0% financing for an extended period of time.

As mentioned earlier, brand building may be the most effective activity to invest in right now. If you’re cutting down on ad budget to alleviate the burden of reduced cash flow, you should allocate what’s left to one of the following initiatives:

  1. Brand-building
  2. Content marketing

Your ad creative and marketing must be empathic and in tune with the current situation. For auto brands, this means acknowledging current sentiment and behavior:

  • Sentiment: Demonstrate that you understand what your customers are going through. It’s okay to lead them to a specific action, but be empathetic to how they’re feeling and the challenges they face.
  • Behavior: Provide relevant information. Remember, more people are in an extended state of research. Use your ad campaigns to provide the right content to the right people as they’re looking for it.

The “right content” includes information that is relevant and personalized to the individual. For example, you may be targeting website visitors that have previously viewed a particular make and model of car. Tailor your ad creative to provide additional information, as well as an entry-point to your digital retailing experience.

Most importantly, use your ads to assure that you’re there for your customers on the other side of this outbreak. Things will go back to normal, and when they do, you’ll be there to help them.

3. The Sharing Economy

For many, 2020 was predicted to be a year where more people adopted car-sharing, with brands like Zipcar leading the way.

According to PWC, one in three kilometers driven could involve car-sharing concepts by 2030. Zipcar’s impact report demonstrates how their fleet of vehicles benefits the environment and city infrastructure.

For those living in densely populated urban areas, flexible car sharing is considered as a cheaper and more accessible travel option. And if all returns to normal after the COVID-19 pandemic has died down, we should see growth in this area continue.

However, we still don’t know what the true impact of the outbreak will be in a post-coronavirus world. People are cautious about washing their hands after touching common surfaces. Will this behavior create friction in demand for these services?

For startups in the car-sharing economy, it’s a game of “wait-and-see.” People may be happy to use these services once they know the threat has been eliminated.

One potential way to combat these lingering concerns is to get ahead of them. For example, equip every vehicle with hand sanitizers and include hygiene guidance within the apps used to access them. The key lesson is to innovate and respond to consumer behavior.

4. Leadership Is Critical Now More Than Ever

Digital transformation has taken hold of every stage of the customer journey. This means establishing a personal connection with your customers is critical.

In a world lead by automation, human “soft skills” have become more important than ever. From a strategic business perspective, it allows auto brands and their directors to make key decisions on positioning, creative and user experience.

But during the COVID-19 outbreak, strong leadership is also required to help employees navigate uncertainty. This means adapting the business to the current climate and reassuring people on what lies ahead.

This leadership is also critical as you respond to how the outbreak progresses. As mentioned earlier, digital retailing is traditionally limited to all but the very last steps of the customer journey. 

However, can you find ways to innovate and adjust these in-person transactions to be conducted remotely? Many high-end brands are beginning to do so, while remaining within the constraints of franchise laws.

Getting the car from your lot to the customer is the next challenge. If customers must collect their new car, are there ways you can do this in a contactless way while maintaining a human connection? During times of forced social isolation, you may need to find a way to bring the car to the customer while keeping delivery staff safe.

Leadership requires a balance between automation and personalization. If sales reps can communicate and guide customers through the buying process remotely, it’s possible that brands can survive – and even thrive – during these times.

More importantly, you can set a foundation for yourself for a strong comeback once the crisis is over.

5. The Impact on Electric Vehicles

The push for alternatively fueled vehicles (AFV) has steadily increased over the past few years. In 2018, it was reported that electric vehicles (EV) sales accounted for 1.8% of the market. In 2019 that share grew to 3.4%, and it was predicted 2020 would see it rise to 5.5%.

However, as car manufacturers shut down in light of the COVID-19 outbreak, the EV market is expected to take a larger hit than traditional gas-based cars.

Why? Because EV manufacturers depend on the global market in order to source batteries, a core component of the technology. Accessibility to these components has been choked due to closed border, which gives manufacturers less control over when production can begin again.

There has also been a significant drop in oil prices, meaning petrol vehicles have (albeit temporarily) become cheaper to run. If people become more price-conscious after the pandemic is over, demand for EV’s may shift back towards gas-powered cars.

Despite this, many industry experts believe the future is still bright for EV in the long term. The technology is still nascent, and over time it’s likely to become more affordable.

For dealers selling EV in their lot, watching how the market unfolds is key. It’s likely that the analysis published on the market, along with data on consumer demand, will become more readily available over the coming months. Keep an eye on this data, and use it to make an informed decision on your EV inventory and long-term strategy.


The marketing playbook you used 3 months ago has changed dramatically. For auto business leaders and marketers looking to adapt to the current state of the world, a mindset shift is required.

Put yourself in the headspace of starting a new job. Treat current circumstances as if you were familiarising yourself with a new market. With new hurdles come new opportunities and ways of connecting with your customers.

However, make sure you do so in an empathic way. A large segment of the market is struggling right now, so avoid coming across as tone-deaf in your marketing. Above all, innovate and find new ways to serve them as we overcome these challenges together.

Tom Whatley

Tom Whatley

Tom Whatley is the founder of Grizzle, a content marketing agency that helps B2B, SaaS and tech companies generate more traffic and leads through high-value content and distribution.

The First Machine Learning Marketing Platform
Built to Scale Search for Local Resellers & Agencies

Automate, optimize and track more campaigns, more profitably.