Written by, Alicia DeCroix, Marketing Manager at dlhBOWLES, Inc. December 21, 2020
As we near the end of 2020, it can be hard to wrap our heads around what happened and where we are going as a country and as an industry. Our heart goes out to all the people still suffering from the wrath of 2020 that has left the world in disarray. Many are saying the end of this pandemic is near. Now that we have several vaccine options available and we can move onto the next chapter and make this decade one that is not defined by COVID-19, but defined by how the world came together to fight COVID-19 and save lives.
In the final weeks of 2020, the world is beginning to vaccinate front line health care workers through a historically fast development and approval process that led to Emergency use authorizations for eight vaccines worldwide to date, two of these in the United States. Despite the news of a vaccine, it appears the general population still won’t be able to obtain the vaccine until after April 1, 2021. Because of this, the economy is not expected to see significant improvement until the summer of 2021, prompting many countries to infuse more money into the economy through stimulus packages.
Throughout 2020, new vehicle sales have been lower than predicted before the pandemic, keeping in mind we were already anticipating an industry correction and downturn. However, performance outpaced expectations for many on a monthly basis from June through October. Unfortunately, November and December have seen a dip due to a number of factors. The latest surge in COVID-19 cases, lacking inventory due to supply chain and workforce issues, and delayed purchase due to economic concerns by consumers leads us to believe that Q1 2021 will also see lower sales as the world finishes its recovery.
We would argue that lower vehicle sales, is not necessarily a bad thing for our industry right now. The disparity between vehicle sales and production throughout the year has led to low inventory levels in some of the most popular vehicles and Automakers are struggling to balance the inventory. The low inventory is causing many twists in vehicle sales with buyers purchasing alternative vehicles or delaying their purchase until the equipment package that they want in their favorite vehicle is available.
As of today, 2020 U.S. Vehicle Sales are expected to finish around 14.3M units increasing 10% to around 16.0M in 2021. This likely will materialize through a flat daily sales rate for the first few months of 2021 ramping up to pre-pandemic levels and leveling off during summer. Timing will remain critical in 2021 for Automakers. The launch of several key vehicles will fuel sales early on in 2021 such as the re-designed F-150 (late 2020), Grand Cherokee (Q2/Q3 2021), Wagoneer (Q2 2021), and finally the in Bronco (Q2 2021).
A few wild cards exist in the production forecast with the launch of many new electric vehicles from GM, Lucid, Rivian, Faraday and Lordstown Motors. Although these vehicles only make up around 75k units of the annual forecast, their success in the market will drive the direction of the electric vehicles across all OEM portfolios in the future years.
There is much to look forward to in 2021, albeit still some significant uncertainty. As we end this year, everything points to a better year to come for people and businesses across the world. We think we can all take a deep breath, enjoy the holidays, and ring in the new year with less dread and a more positive outlook towards the future.
About the Author
Alicia DeCroix is the Marketing Manager at dlhBOWLES, Inc. in Columbia, Maryland. She has a bachelor’s degree in business management from Eastern Michigan University and a Master of Science in Management, Strategy, and Leadership from Michigan State University. She has worked in the Automotive industry for 20+ years and is a seasoned veteran in forecasting and analyzing the Automotive Industry providing stakeholders with insight to drive business forward.