Increased demand for new vehicles during the COVID-19 pandemic helped General Motors and other automakers begin reporting strong fourth quarter US sales this week while executives voiced optimism the rebound from low sales during the April-May production shutdown would continue in 2021.
According to Reuters, GM reported a 4.8% increase in US sales in the fourth quarter, while Toyota and Volkswagen saw sales rise 9.4% and 10.8%, respectively.
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Industry officials, the news agency said, expect the US auto sector to finish the year with 2020 sales in the range of 14.5m to 14.6m, down from 17.1m in 2019. But with vaccines being rolled out, low interest rates and strong consumer savings, officials expect demand this year to rebound.
Toyota officials told Reuters they expect 2021 US new vehicle sales of 16m, while VW forecast 15.6m.
“We’re ready to rock 2021,” David Christ, Toyota Motor North America group vice president and general manager of the Toyota division, told Reuters on a conference call, describing the US consumer as resilient.
Volkswagen of America chief executive Scott Keogh agreed on 2021 expectations in a separate call: “I’m as optimistic as one can be.”
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By GlobalDataGM chief economist Elaine Buckberg said the automaker saw an “inflection point” for the US economy in the spring. GM’s average transaction price per new vehicle set a full year record of US$39,229 in 2020.
“Widening vaccination rates and warmer weather should enable consumers and businesses to return to a more normal range of activities, lifting the job market, consumer sentiment and auto demand,” she said in a statement cited by Reuters.
Consumers in the financial position to buy a new car during the coronavirus pandemic aren’t holding back on upsizing their purchases in favor of bigger vehicles with more amenities, Reuters added, citing industry consultant Edmunds.
The average down payment for a new vehicle climbed to $4,734 in the fourth quarter, from $4,329 a year ago, Edmunds said.
