You are here: Home » International » News » Companies
Business Standard

Increased new-car demand during Covid has US industry optimistic about 2021

Increased demand for new vehicles during the Covid-19 pandemic helped General Motors and other automakers report strong fourth-quarter US sales on Tuesday

US Automakers | US auto industry | US auto sales


General Motors, GM
General Motors logo

(Reuters) -Increased demand for new vehicles during the COVID-19 pandemic helped General Motors Co and other automakers report strong fourth-quarter U.S. sales on Tuesday, and executives voiced optimism the rebound from low sales during the April-May production shutdown will continue in 2021.

GM reported a 4.8% increase in U.S. sales in the fourth quarter, while Toyota Motor Corp and Volkswagen AG saw their sales rise 9.4% and 10.8%, respectively.

Industry officials expect the U.S. auto sector to finish the year with 2020 sales in the range of 14.5 million to 14.6 million, which would be down from 17.1 million in 2019. But with vaccines being rolled out, low interest rates and strong consumer savings, officials expect demand this year to rebound.

Toyota officials said they expect 2021 U.S. new-vehicle sales of 16 million, while VW forecast 15.6 million.

"We're ready to rock 2021," David Christ, Toyota Motor North America group vice president and general manager of the Toyota division, told reporters on a conference call, describing the U.S. consumer as resilient.

Volkswagen of America Chief Executive Scott Keogh agreed on 2021 expectations in a separate call. "I'm as optimistic as one can be."

GM Chief Economist Elaine Buckberg said the U.S. automaker sees an "inflection point" for the U.S. economy in the spring. The Detroit automaker's average transaction price per new vehicle set a full-year record of $39,229 in 2020.

"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," she said in a statement.

Consumers in the financial position to buy a new car during the pandemic aren't holding back on upsizing their purchases in favor of bigger vehicles with more amenities, according to industry consultant Edmunds.

The average down payment for a new vehicle climbed to $4,734 in the fourth quarter, from $4,329 a year ago, Edmunds said.


(Reporting by Sanjana Shivdas in Bengaluru and Ben Klayman in Detroit; Editing by Maju Samuel and Aurora Ellis)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, January 06 2021. 09:21 IST