Car sales in 2020 are expected to reach their lowest point in almost a decade

Analysts at several research firms expect U.S. vehicle sales to reach 14.4 million to 14.6 million in 2020, down about 15% from a year earlier and the lowest level. from at least 2012. The decline would trigger an unprecedented five-year span with sales exceeding 17 million vehicles annually.

Among the car companies that go beyond the wider industry were two of its biggest players, General Motors Co.

GM 2.81%

and Toyota Motor Body.

TM -0.04%

GM said on Tuesday it had seen a strong increase in the fourth quarter of deliveries of large pickups and SUVs, its most profitable vehicles. Its overall sales fell 11.8% in 2020, better than the expected result for the wider industry.

Toyota said its sales in the US fell 11.3%, as steady demand for the Rav4 SUV and Tacoma was offset by sharper declines in its range of cars, including Corolla and Camry sedans.

Nissan engine Co.

Sales fell more than any major carmaker in 2020, down 33 percent, the Japanese car company said.

Manufacturer of electric vehicles Tesla Inc.

it also boomed in 2020. The company’s sales in the US increased by about 15% by November to nearly 180,000 vehicles, according to an estimate by market research firm Motor Intelligence.

Tesla, which does not disclose US results, said last week that its global sales for this year had risen by about 36% to almost 500,000 vehicles.

The industry’s declining sales in 2020 tell us only part of the story of a turbulent year in the automotive industry, however, one that included closing the entire industry last spring, raising prices for new and used vehicles, and changing the way Americans buy cars.

Now, analysts say conditions are ripe for further gains this year, backed by near-record interest rates and another round of federal stimulus, including direct payments to some Americans starting this week. Dealers and executives are optimistic that the consequences of the pandemic will stimulate demand for new cars, as some consumers opt for ownership of their personal vehicle over public transport or commuting.

However, potential pitfalls remain, including the unknown duration of the pandemic, a continuing shortage of dealer stocks and possible supply chain bottlenecks, including the uninterrupted availability of semiconductor chips.

Jeff Guyton, president of Mazda Motor Body

Operations in North America consider the return of the industry continuing this year, but consider that “it will probably be more gradual than explosive”. Mazda saw sales growth of less than 1% in 2020, among the best results in the industry, largely due to an invigorated range of SUVs.

The return of the auto industry is a relief for carmasters who feared the worst last spring, when their North American factories were shut down because of Covid-19 for nearly two months and analysts wondered if people would buy cars. against the background of a pandemic. Some forecasters have predicted that sales in 2020 will fall below the mark of 13 million vehicles.

By the end of spring, however, car buyers began to grow in unexpectedly strong numbers. Car companies, which have quickly put in place safety protocols to prevent the spread of coronavirus among factory workers, are struggling to meet the demand since then.

Now, the industry is facing an inventory crisis that is expected to last until 2021, say dealers and executives. Stocks of new vehicles at US dealerships have been operating at about 25% below normal for months, with more severe shortages in large vans. This narrowed global sales, but also led to a seller’s market, sending prices rising to record levels, along with profits for some car companies, dealers and parts suppliers.

The average price paid for a vehicle in December was about $ 38,000, up from about $ 34,000 in early 2020, according to research firm JD Power. Dealers whose lots are only half full have been more stingy with discounts, said Tyson Jominy, JD Power’s vice president of data and analysis. In addition, buyers are turning to larger and more expensive vehicles, such as vans, he said.

Another factor, dealers say, is that some American consumers tired of quarantine – forced to give up travel and meals – have spent their money on items with big tickets, such as boats, home projects and new cars.

Chicago dealer Mike Maheras said the three Chevrolet dealerships in Illinois have tightened to meet the demand for state-of-the-art trucks. The stores, which normally keep over 100 days of truck supply on their lots, operate for less than a month.

“We see a huge demand for trucks,” he said. “Instead of taking vacations, customers take care of their vehicle purchases.”

Analysts predict that carmakers will remain in the process of recovering restocking stock for much of the year, likely resulting in better profit margins for manufacturers and dealers – and fewer offers for consumers.

Research firm IHS Markit recently said it expects tight stocks to last until 2021. It is talking about 2021 vehicle sales in the US in 2021, which would be an increase of about 10% over last year.

Write to Mike Colias at [email protected]