US car sales recover: Americans buy cars again

US car sales recover: Americans buy cars again

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

GM made the announcement Tuesday along with its own fourth-quarter sales figures.

That doesn’t mean car sales are completely back: fleet sales, which typically make up about 20% of total U.S. sales, are still a long way off, GM said. This is especially true for sales to rental car companies, which account for about half of fleet sales.
By GM (GM) specifically, sales in the fourth quarter rose nearly 5% from a year ago – but that’s not a fair comparison, as GM’s sales in the fourth quarter of 2019 were affected by a long strike at the carmaker. GM’s annual sales have fallen by about 12% since 2019.
But Toyota (TM) also reported that U.S. quarterly sales rose 9% year-over-year. Toyota has traditionally not been as dependent on fleet sales as its competitors. Its sales fell by 11% for the full year.

GM said the average transaction price in the fourth quarter was a record $ 41886. The annual average of $ 39,229 also set a record.

GM also said car buyers are spending more on the vehicles they buy, choosing more expensive models such as larger sports utility vehicles and upgrading to more expensive option packages – all good news for carmakers. The strong retail figures also mean that carmakers do not have to offer so much in terms of incentives to attract buyers.

Krebs said car sales were boosted by the fact that many Americans who were able to keep their jobs did not hurt their income through the pandemic. But with huge restrictions on travel and eating, many of the consumers spent money on other things, such as home improvement or new vehicles. Buyers have also been helped by low interest rates which has reduced the cost of car payments.

There are also workers who in the past relied on public transport, or who are paying homage, who now prefer to have their own vehicle because of concerns about the possible spread of the Covid-19 virus.

But for the millions who lost their jobs or lost their income as a result of the recession, a new car is out of reach than ever due to rising prices. Carmakers are now offering fewer models that cost less than $ 30,000, Krebs said. It will henceforth be a headwind for car sales, and it is likely that the industry will reach the 17 million US car sales point it reached in 2019.

“The automotive industry is a perfect illustration of the K-shaped recovery,” Krebs said. He refers to the gap between profits at the top of the market and the ongoing difficult times for people with fewer resources.

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Other carmakers will report U.S. sales in the fourth quarter later Tuesday or Wednesday. It is predicted that the companies will also report stronger sales than in the second and third quarters, but many will see a decline compared to a year ago, because unlike GM, their sales in the fourth quarter of 2019 were not through a strike does not affect.

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