Macroeconomic Trends- A New Age of Cars
The Coronavirus pandemic has shaken just about every sector in our economy, and the automobile industry is a prime example of that. Ever since the world began social distancing, there was a steep decrease in attendance on public transportation. This effect of COVID-19 has caused a boom in the demand for cars in the US. Particularly, used cars are selling out as fast as ever, partly due to the supply chains of automakers being disrupted by the pandemic. Online used car retailers have been capitalizing on this uptick in demand and are enjoying record sales through the pandemic. In the second quarter of 2020, Carvana, one of the largest used car retailers in the US, recorded an increase in sales by 25% compared to a year earlier. Carvana’s contactless delivery feature has helped them achieve these sales and is a large reason they’re a disruptor in their industry. Other companies such as Vroom and Carguru are following in Carvana’s footsteps with the goal of drastically changing the way we buy cars. In relation to other technological trends, this trend in the used car industry has become so successful since it takes out the “middle-man” from the transaction. In this situation, the middle-man represents the dealerships which all consumers collectively dread going to when buying cars. It also saves the online car retailers a ton of money and increases their operating margins. As companies strive to make buying and selling used cars more efficient and convenient, this trend seems to be here to stay.