Auto Sales Bounce Back In 2021, But Not All The Way; Prices Stay High

By Jim Henry

Forecasters expect U.S. auto sales to continue to bounce back in 2021, but not all the way back to pre-coronavirus levels.

Consumers can also expect prices to remain high for new cars and trucks. New-vehicle inventories have improved since last spring, but supplies are still low relative to demand. The usual formula for big discounts is when there’s too much supply and not enough demand.

U.S. auto sales in 2020 were 14.5 million, down 15% from 2019. The drop was mostly because of coronavirus-related production shutdowns and dealership closings in the early days of the pandemic, and not for lack of demand.

For 2021, even though customer demand is still strong, forecasts are for the mid-15 million range, an increase of about 7% from 2020.

Sales in 2019 were 17.1 million. Patrick Manzi, the chief economist for the National Automobile Dealers Association, said 2020 was the first time since 2014 that U.S. auto sales failed to top 17 million.

The dealer association expects 2021 sales of 15.5 million. Forecasters at car-shopping website Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, the senior economist for Cox Automotive, recently said Cox expects 2021 sales of 15.7 million.

Chesbrough said the Cox Automotive forecast is on the conservative side, largely because of the ongoing threat of the coronavirus to the U.S. economy. “In general, we feel more upside risk to our forecast than downside,” he said.

Earlier this month, Toyota Motor North America said it expects 2021 sales of about 16 million.

“If you can get the virus under control, you do see a strong recovery,” said Pete Kelly, managing director, LMC Automotive, in a recent, online panel discussion hosted by the Society of Automotive Analysts, Farmington Hills, Mich.

Kelly described global auto sales in 2021 as, “not a complete rebound, but quite a lot of ground recovered.” For North America, LMC Automotive expects auto sales of 18.4 million in 2021, up 9% from 17 million in 2020.

Source: Auto Sales Bounce Back In 2021, But Not All The Way; Prices Stay High