DETROIT—The U.S. auto industry will hit its lowest annual sales total in 2020 in nearly a decade, thanks to the coronavirus pandemic, the Wall Street Journal reports. However, the past six months registered a higher demand, boosting auto company profits and providing a rosier forecast for 2021.
Analysts predict U.S. vehicle sales will be between 14.4 million to 14.6 million last year, 15% less from the previous year and at the lowest number since 2012. The decrease shattered a five-year run with annual sales above 17 million vehicles. These analysts say the environment will likely bolster car sales into 2021, with near-record low interest rates and more federal stimulus money.
Auto executives and dealers point to new-car demand from consumers opting for personal vehicles rather than ride shares or public transportation. But the continued pandemic and dealer stock shortage might upend any inroads. “The resilience of both the industry and the consumer has amazed me,” said Jeff Schuster, president of global forecasting at LMC Automotive.
The inventory shortfall will remain for a while with new-vehicle stock at U.S. dealers about 25% below normal, making it a seller’s market, with both new and used vehicles notching record prices. Some dealers say U.S. consumers, tired of quarantine restrictions, are shelling out for larger items, like home projects, boats and new cars.
“We see a lot of pent-up demand for trucks,” said Mike Maheras, who owns three Illinois Chevrolet dealerships. “In lieu of taking vacations, customers are treating themselves on their vehicle purchases.”
New-car demand will remain healthy, according to IHS Markit, which puts sales of U.S. vehicles in 2021 at about 16 million, a 10% bump from 2020.