DETROIT (AP) – New vehicle sales in the U.S. fell 14.6% last year, but a recovery in the second half of a coronavirus-related fall in the spring generated optimism for a recovery later this year.
The automakers reported on Tuesday the sale of 14.57 million new vehicles in the year, a far cry from the previous five years, with sales above 17 million. But the 2020 performance was better than most predictors expected when the pandemic forced car factories and many dealerships to close in April and May.
General Motors chief economist Elaine Buckberg said she expects sales to recover in the spring. With the warmer climate and the increase in new vaccinations against coronavirus, life should return to normal, raising the job market and the demand for automobiles, she said in a statement.
“We feel like there’s light at the end of the tunnel,” said Randy Parker, vice president of sales at Hyundai Motor America. “I think it will be a solid year.”
But Parker said he was still cautious, with hospitals crowded in California and cases on the rise in other states. “It is far from over,” he said. “We cannot afford to let our guard down right now.”
Last spring, unemployment soared when states imposed blockades and other measures to limit the spread of the virus. Car sales fell 34% in the first half of the year with the closure of factories about two months ago, cutting off the supply of new vehicles.
But with the arrival of summer, people with jobs started to buy crowded cars, trucks and SUVs at the end of the year. That and low interest rates increased sales and pushed the average car selling price to a record high of just over $ 38,000 in December, according to JD Power. Also in December, sales increased by 5% over the same month in 2019, and GM said its sales have improved each month since May.
“Those who have not been financially impacted by the pandemic are redistributing travel funds for retirement, buying homes and vehicles,” said Jeff Schuster, president of global vehicle forecasting at consulting firm LMC Automotive.
Automakers have not yet been able to make up for lost production during the closure of their plants, and this has kept inventory tight and limited buyers’ choices for more expensive vehicles, Schuster said.
Retail sales to individual buyers are close to normal levels, but sales to fleet buyers, such as car rental companies, are still low.
Analysts say higher prices and restricted inventory will not change anytime soon.
“These factors will continue into 2021, with supply decreasing demand and reflecting higher prices for new and used vehicles,” said Karl Brauer, executive analyst at the automobile website iSeeCars.com.
Schuster said he expects 2021 sales to rise to 15.7 million this year as inventory improves in the second and third quarters. He does not expect a return to 17 million until at least 2024.
Among automakers, GM’s sales fell 11.9% in the year, while Toyota’s sales fell 11.4%. Ford fell 15.4%, while Fiat Chrysler was down 17.4%. Ailing Nissan recorded a 33.2% drop in sales for the year, while Honda fell 16.3% and Hyundai’s sales fell 10%. The Volkswagen Group fell 12.8%, while Subaru’s sales fell 12.6%.
In the year, sales of all-electric vehicles increased 9.9% to 260,092, according to Autodata Corp.
Car sales continued to fall, reaching 28.3% of the market, with trucks and SUVs representing 71.7%.
Ford’s F-Series pickups remained the country’s best-selling vehicle, with 787,422 sales, down 12.2%. Chevrolet Silverado came in second with 586,675, an increase of 2.8%. Silverado kicked the Fiat Chrysler Ram pickup out of second place. It passed the Silverado in 2019. The Toyota RAV4 was the best-selling SUV with 430,387 in sales, while the Toyota Camry was the most popular car with 294,348 in sales.