An ‘Unprecedented’ Disruption Is Ahead for the $1.5 Trillion Auto Market
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The coronavirus pandemic will significantly disturb the auto industry by flooding the used-vehicle market with supply that won’t be met with demand from quarantined and distressed consumers, according to Morgan Stanley analysts.
“We would urge investors to prepare for unprecedented imbalances in the supply/demand for used cars through the rest of the year,” analyst Adam Jonas wrote in a report. The dislocation will have far-reaching implications, since roughly 90% of U.S. purchases of new autos involve a trade-in of a used vehicle or the return of a car that’s been leased, he said.