New car dealers navigated COVID onset, drove NJ economy in ’20

Despite a temporary, pandemic-ordered suspension of in-person sales that led to as much as an 80% drop in purchases last March and April, New Jersey's new car dealerships rebounded to post only a 15% sales loss for the whole of 2020, and are emerging from the COVID-19 crisis in a stronger position than before.

"April of 2021 was the strongest motor vehicle sales month in 15 years, so there is a great deal of pent-up demand," Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, said.

NJ CAR serves just over 500 franchised retailers of new vehicles up and down the Garden State, more than half of which Appleton said are operated by individuals or entities that own three or fewer physical rooftops.

So the new car business, unlike primarily online used car "vending machines" such as Carvana, remains very much a "mom-and-pop" operation, according to Appleton.

Still, it's an operation that provides more than 36,000 full-time and nearly 70,000 total jobs across the state, positions that can't be outsourced, and which pay out an average salary of about $71,000.

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A new NJ CAR analysis finds that, at a time when many other professions are struggling to hire workers back, employment at new car dealerships in the state declined only 7% last year, and Appleton expects that difference to be made up by the end of 2021.

Just how much of an economic driver is the new car business in New Jersey? NJ CAR's figures showed $34.6 billion in sales, even in a "down" year in 2020, and $1.73 billion in state and local taxes collected or paid.

"New car dealerships across New Jersey continue to be the economic engine on Main Street, in every county and just about every town across the state," Appleton said.

And even though showrooms were shuttered for a couple of months, dealership service departments remained open, providing a continuous in-person link to customers.

That's part of the reason why, Appleton said, those dealers experienced a V-shaped recovery from June through August.

And while some may still feel the allure of a contactless process to buy a used car online, Appleton said used cars aren't a commodity, and plus, every new car dealer also sells used cars.

Most of all, new car dealers have found a way to resume what they do in a safe way, and have the expertise and tools necessary to service what they sell.

"They did what was necessary to protect their employees and consumers who were coming in to do business. They found new ways to improve the customer experience online," Appleton said. "Every new car dealer in the state of New Jersey is ready, willing, and able to do business remotely and online with their consumers, to the maximum extent those consumers want to do it."

Patrick Lavery is New Jersey 101.5's afternoon news anchor. Follow him on Twitter @plavery1015 or email patrick.lavery@townsquaremedia.com.