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 by 2020, which would be about 15% lower than a year earlier and the lowest level since at least 2012. The decline would be a unprecedented five-year stretch in which sales accounted for 17 million vehicles annually.

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

GM 2.75%

a Toyota Motor Corp.

TM -0.04%

GM said Tuesday it had seen a big increase in the delivery of pickups and large SUVs, the most lucrative vehicles, in the fourth quarter. Total sales decreased by 11.8% in 2020, better than the expected result for the broader industry.

Toyota said U.S. sales fell 11.3% as steady demand for the Rav4 SUV and Tacoma pickup was offset by stronger declines in its car range, including the Corolla and Camry sedans.

Nissan Motor Co.

In 2020, the Japanese car business fell by more than any major carmaker and fell by 33%.

Electric car manufacturer Tesla Inc.

also gained momentum in 2020. U.S. sales rose about 15 percent to nearly 180,000 vehicles by November, according to an estimate by market research firm Motor Intelligence.

Tesla, which is not breaking out of U.S. results, said last week that its global sales for the year rose by about 36% to nearly 500,000 vehicles.

The drop in sales in the industry in 2020 tells only part of the story of a turbulent year in the automotive industry, one that includes the factory closures in the industry this past spring, the rising prices for new and used vehicles and relocations in the way Americans buy for cars.

According to analysts, the conditions are ripe to further increase results this year, plagued by near-record low interest rates and another round of federal stimulus, including direct payments to some Americans starting this week. Dealers and drivers are optimistic that the effects of the pandemic will spur demand for new cars, as some consumers prefer ownership of personal vehicles over public transport or shared rides.

Potential pitfalls remain, including the unknown duration of the pandemic, a continuing shortage of trader stocks and possible supply chains, including the availability of semiconductor chips.

Jeff Guyton, President of Mazda Motor Corp’s

In North American operations, the rebound of the industry is going to continue this year, but thinks it will “probably be more gradual than explosive.” Mazda achieved a sales increase of less than 1% in 2020, one of the best results in the industry, mainly thanks to a revamped range of SUVs.

The return of the automotive industry is a relief for motorists who feared the worst last year, when their North American factories were closed for nearly two months due to Covid-19 and analysts wondered if people would buy cars in the midst of a pandemic. Some forecasters predicted that 2020 sales would fall below the 13 million vehicle mark.

By late spring, however, car buyers had unexpectedly started turning strong. Motor companies, which quickly put in place safety protocols to prevent the spread of the coronavirus among factory workers, have since tried to meet the demand.

Traders and executives have said the industry is now facing a stock crisis that is expected to last until 2021. New vehicle shares at U.S. dealers have been running about 25% below normal for months, with worse shortages in large pickups. This limited overall sales, but also led the retail market to raise prices to record levels, along with profits for some automakers, dealers and parts suppliers.

The average price paid for a vehicle in December was about $ 38,000, compared to $ 34,000 in early 2020, according to research firm JD Power. Tyson Jominy, vice president of data and analytics, says Tyson Jominy, vice president of JD Power, said traders whose lots are just as half full were stingy. On top of that, buyers are moving to larger, more expensive vehicles such as pickups, he said.

Another factor, traders say, is that some U.S. consumers in quarantine – forced to travel and eat out – have spent their money on big ticket items such as boats, home projects and new cars.

Chicago dealer Mike Maheras said his three Chevrolet dealers in Illinois went to great lengths to meet the demand for high-end pickups. The stores, which normally keep trucks on their yards for more than 100 days, operate less than one month.

“We’re seeing a huge pent-up demand for trucks,” he said. “Instead of going on holiday, customers process their vehicle purchases.”

Analysts predict that carmakers will remain in stock for much of the year, which is likely to result in better profit margins for manufacturers and retailers – and fewer transactions for consumers.

Research firm IHS Markit recently said the expected inventory would last until 2021. The U.S. vehicle sales of the U.S. Vehicle Management by 2021 would amount to about 16 million, which would be an increase of about 10% over last year.

Write to Mike Colias by [email protected]