SANTA MONICA, Calif.—2020 is looking to be another year of historically high new vehicle sales for the automotive industry, according to a new report from the car shopping experts at Edmunds. As part of the Edmunds 2020 Automotive Industry Trends Report, analysts forecast that a total of 17.1 million new vehicles will be sold in 2020, matching last year's tally and marking the sixth year in a row that new auto sales will top 17 million.
“The auto industry has some decent tailwinds heading into 2020: Strong economic factors such as low unemployment and high consumer confidence are carrying over from last year, finance rates are expected to remain relatively stable, and this is a presidential election year, which historically tends to correspond with a year-over-year lift in new vehicle sales,” said Jessica Caldwell, executive director of industry insights at Edmunds, in a press release.
Although new vehicle sales are expected to be in a healthy place this year, Edmunds analysts note that rising prices present some roadblocks for the industry. According to Edmunds data, the average transaction price for a new vehicle in 2019 climbed to a record $37,183, and prices are only expected to keep rising.
“Prices are shooting up because shoppers are opting for pricey SUVs and trucks packed with more high-tech options than ever before,” said Caldwell. “These increased costs, combined with the discontinuation of more affordable options like domestic passenger cars, could prompt shoppers to shift their focus to the used market—or delay their purchase altogether.”
A resurgence of hybrid vehicles, particularly versions of the popular RAV-4, CR-V and Escape, will drive green car sales to record market share as well. Edmunds analysts estimate that hybrid vehicles will grow by 18% in 2020, pushing the green car market to a record market share of 4.8%, compared with 4.3% in 2019.