The U.S. auto industry closed 2020 as its weakest year since 2012, but automakers see a rebound in 2021’s second half as vaccines are widely distributed, the job market strengthens, and consumers begin to spend again.
Consumers bought about 14.5 million cars and light trucks last year, 15 percent fewer than in 2019 and the lowest number in eight years, as the industry was grappling with the Great Recession and Chrysler and General Motors pleaded for a federal bailout.
“We look forward to an inflection point in the U.S. economy in spring,” Elaine Buckberg, G.M.’s chief economist, said in a New York Times interview. “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.”
The industry will sell 15.8 million cars and light trucks this year, according to Alix Partners, a business consulting firm. That would be a gain of about 9 percent year-on-year but still about 7 percent below the 17-million annual average the industry has booked over recent years.
“If the vaccination rollouts happen well, you could see additional spending unleashed,” Mark Wakefield, an Alix managing partner, told The Times.
“There’s a lot of disposable income out there,” Scott Keogh, CEO of Volkswagen of America, agreed. “I’m as optimistic as one can be. What is weighing on everything is how quickly we can get those shots rolled out.”
TREND FORECAST: U.S. auto sales are expected to fall 15 percent this year. But, in the new ABnormal COVID World, economic fundamentals don’t matter.
Once again, the ONLY reason the economy and businesses will bounce back according to the mainstream media buzz? It’s all about a vaccine shot in the arm: “Widening vaccination rates.” “If the vaccination rollouts happen well, you could see additional spending unleashed.” “What is weighing on everything is how quickly we can get those shots rolled out.”
Again, we disagree. Yes, there will be a quick bounce-back this spring/summer, but the damage done by the draconian lockdowns, which are unprecedented in world history, has pushed the world into the “Greatest Depression.”
Does that mean there will be no business, and the world economy will grind to a halt? No. Instead, it portends a future of slowing and declining economic growth.
TRENDPOST: Overseas, Chinese car sales fell 6.8 percent last year… the third straight year of declining auto sales. Ford Motors said Monday that it would halt auto production in Brazil, thus eliminating some 5,000 jobs.
According to the Wall Street Journal, Ford lost $386 million through the first three quarters of 2020. Indeed, the implications of the COVID War are continually diminished by rising equity markets and hopes of vaccinations boosting up sagging markets while politicians, the media, and industry heads downplay the economic severity caused by the closing down of much of the world’s economy.
