Sales of new vehicles in the US last year fell 14.6 percent, but a second-half rebound from a plunge in the spring amid the COVID-19 pandemic kindled optimism for a recovery later this year.
US automakers on Tuesday reported selling 14.57 million new vehicles for the year, a far cry from the five previous years with sales of more than 17 million.
However, last year’s performance was better than most forecasters had expected when the pandemic forced auto factories and many dealerships to shut down in April and May.
Photo: AFP
General Motors Co chief economist Elaine Buckberg said that she expects sales to recover in the spring.
With warmer weather and widening COVID-19 vaccinations, life should become more normal, lifting the job market and auto demand, she said in a statement.
“We feel like there’s light at the end of the tunnel,” said Randy Parker, vice president of sales for Hyundai Motor America. “I think it’s going to be a solid year.”
However, Parker said that he remains cautious, with hospitals overflowing in California and cases rising in other states.
“It’s far from over,” he said. “We can’t afford to let our guard down at this point.”
Last spring, unemployment skyrocketed as states across the US imposed lockdowns and other measures to limit the virus’ spread.
Auto sales tumbled 34 percent in the first half of the year, as factories closed for about two months, cutting off the supply of new vehicles.
However, as the summer came, people with jobs started splurging on loaded-out cars, trucks and sports utility vehicles late in the year.
That and low interest rates drove sales up and pushed the average auto sales price to a record of just over US$38,000 last month, J.D. Power said.
Also last month, sales rose 5 percent from the same month in 2019, and GM said that its sales have improved every month since May.
“Those that haven’t been financially impacted by the pandemic are redistributing funds from travel to home improvement, house purchasing and vehicles,” said Jeff Schuster, president of global vehicle forecasting for the LMC Automotive consulting firm.
Automakers still have not been able to make up for production lost during their factory closures, and that has kept inventory tight and limited buyers’ choices to more expensive vehicles, Schuster said.
Analysts have said that the higher prices and tight inventory are not soon to change.
“These factors will continue into 2021, with supply lagging demand and reflected in higher prices for new and used vehicles,” said Karl Brauer, executive analyst for the iSeeCars.com auto Web site.
Schuster said that he expects sales this year to rise to 15.7 million — as inventory improves in the second and third quarters — but does not expect a return to 17 million until at least 2024.
Among automakers, GM’s sales were down 11.9 percent for the year, while sales at Toyota Motor Corp sales were off 11.4 percent. Ford Motor Co’s sales fell 15.4 percent, while sales at Fiat Chrysler Automobiles NV were off 17.4 percent.
Struggling Nissan Motor Co reported that sales were down 33.2 percent for the year, while sales at Honda Motor Co fell 16.3 percent and Hyundai Motor Co’s sales dropped 10 percent. Volkswagen Group’s sales were down 12.8 percent, while Subaru Corp’s sales were off 12.6 percent.
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