More than 14.4 million new cars and trucks will roll out of U.S. dealerships in 2020, according to the latest report from California-based Edmunds, which produces an online vehicle shopping guide and has an office in Detroit.
That figure, bolstered by more than 4 million in new vehicle sales in the fourth quarter, is better than expected considering the disruptions caused by the COVID-19 pandemic, according to Edmunds’ analysts.
“Thinking back to the dire state of the market at the outset of the pandemic, it’s such a testament to the incredible durability of the entire automotive industry — and the resilience of the American consumer — that we’ve seen such a healthy rebound in new car purchases this year,” says Jessica Caldwell, executive director of insights at Edmunds. “A big comeback story of 2020 is without a doubt the recovery of retail vehicle sales, which have nearly returned to pre-pandemic levels.”
Fourth quarter sales of 4,036,744 new cars and trucks reflects a 2.8 percent increase from the third quarter but a 5.7 percent decrease from the same period a year ago.
The estimated 14,416,447 new vehicle sales for 2020 will be a 15.5 percent decrease in sales from 2019 and put the year on track to be the lowest sales year for the automotive industry since 2012.
Detroit’s General Motors Co.’s 2020 forecast is 2.53 million vehicles. The outlook for Ford Motor Co. in Dearborn is 2.01 million unit sales. Auburn Hills’ Fiat Chrysler Automobiles is predicted to end the year with 1.8 million sales.
Edmunds experts note that the steady rise in average transaction prices was a bright spot for the industry, because the increase helped drive profitability for automakers and dealers. Edmunds anticipates that the ATP for new vehicles will surpass the $40,000 mark for the first time in December as consumers continue to show no qualms about upsizing their purchases in favor of bigger vehicles with more amenities.
“It’s certainly not much of a buyer’s market right now: Inventory is still in short supply in certain areas, and automakers and dealers aren’t faced with the pressure to use big discounts to clear out their lots like they normally do at this time of year,” says Caldwell. “Although that’s not stopping higher-earning consumers from continuing to enter the new market like they have throughout 2020, car shoppers who are a bit more price-sensitive might want to skip holiday shopping and wait until next year if they’re looking for big bargains.”
Looking ahead to 2021, Edmunds notes that there are still uncertainties ahead, but remains confident that industry sales will continue at a steady pace without a dramatic decline like the one seen at the outset of the pandemic.
“Even if we face another wave of retail shutdowns, the good news is that dealers are far better prepared now for selling virtually than ever before,” says Caldwell. “And vaccines on the way should only help keep consumer confidence high.”
For more insight on auto industry trends, visit the Edmunds Industry Center here.