US car sales rebound: Americans are buying cars again

US car sales rebound: Americans are buying cars again

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“When you look at where we were in March and how gloomy things were, it’s amazing how strong the year ended,” said Michelle Krebs, senior analyst at AutoTrader.

GM made the announcement on Tuesday along with the launch of its own fourth quarter sales figures.

This does not mean that car sales are back: fleet sales, which typically represent about 20% of total sales in the United States, are still a long way off, GM said. This is especially true for sales to car rental companies, which account for about half of fleet sales.
In GM (GM) specifically, fourth quarter sales increased by almost 5% over the previous year – but this is not a fair comparison, as GM’s fourth quarter 2019 sales were impacted by a prolonged strike at the automaker. GM’s full-year sales fell about 12% from 2019.
But Toyota (TM) also reported that quarterly sales in the U.S. increased 9% compared to the previous year. Toyota traditionally is not as dependent on fleet sales as some of its rivals. In the whole year, its sales fell 11%.

GM said its average transaction price in the fourth quarter was a record $ 41,886. The annual average of $ 39,229 also set a record.

GM also said that car buyers are spending more on the vehicles they are buying, choosing more expensive models, such as larger SUVs, and upgrading to more expensive optional packages – all good news for automakers. The strong retail numbers also mean that automakers don’t have to offer as much in terms of incentives to attract buyers.

Krebs said car sales were driven by the fact that many Americans who managed to keep their jobs have not had their revenues affected by the pandemic. But with widespread restrictions on travel and restaurants, many of these consumers have spent money on other things, such as home improvement or new vehicles. Buyers were also helped by low interest rates, which reduced the cost of car payments.

There are also some workers who have relied on public transport or signaling services in the past who now prefer to have their own vehicle due to concerns about the possible spread of the Covid-19 virus.

But for the millions who lost jobs or had their incomes cut by the recession, a new car is more out of reach due to rising prices. Automakers are now offering fewer models that cost less than $ 30,000, Krebs said. This will continue to be an obstacle to car sales in the future, and will likely prevent the industry from reaching the 17 million US car sales mark it reached in 2019 soon.

“The auto industry is a perfect illustration of the K-shaped recovery,” said Krebs, referring to the gap between gains at the upper end of the market and the continuing difficult times for those with fewer resources.

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Other automakers are expected to report fourth-quarter sales in the United States on Tuesday or Wednesday. These companies are also expected to report stronger sales than in the second and third quarters, but many will see a drop compared to the previous year because, unlike GM, sales in the fourth quarter of 2019 were not affected by a strike.

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