Auto Sales Tumble in 2020, Industry Optimistic About 2021

Jack R. Nerad | Jan 06, 2021

U.S. auto sales for 2020 dropped to their lowest level since the Great Recession. Total sales of cars, SUVs, vans, and light trucks were 14.57 million. That's down 14.6% compared to 2019, but in light of the global pandemic, which shuttered factories and dealers for months, the sales results are much better than many expected. 

Mazda Dealership Showroom

Starting on March 15 as the fear of the pandemic kicked into high gear, auto sales fell off a cliff. April 2020 was one of the worst sales years in recent history, but both consumers and auto dealers demonstrated considerable resiliency. Many dealers began to offer no-contact online vehicle sales, and consumers responded. While the total market was down 34% at the half-year mark, a strong second-half recovery cut the drop in half by year's end. 

"Sales in 2020 ended down 15%, but there's reason for optimism between the lines," Tyson Jominy, vice president of data & analytics at J.D. Power, said. "Nearly half of the decline came from sales to fleet customers, which is a much smaller and lower profitability part of the industry. The more numerous and profitable sales to retail customers grew in three of the final four months of the year, so 2021 is starting with a lot of momentum." 

In the face of strong headwinds, Alfa Romeo, Mazda, Tesla Motors, and Volvo brands all managed to turn in increased sales for the entire year. Tesla was the big winner with sales growth of 20.3%. Sales of electric vehicles as a category grew almost 10%.

At the same time, nearly all the mainstream manufacturers' sales were off by double-digit percentages. Hit by a lack of demand for some vehicles and lack of supply for others, both domestics and import brands were hard-hit by the effects of the pandemic.

According to data compiled by Automotive News, the following automakers saw sales declines in 2020: 

  • Fiat Chrysler was down 17.5%
  • Ford Motor Company was down 15.4%
  • General Motors was down 11.9%
  • Honda was down 16.3%
  • Hyundai was down 9.7%
  • Kia was down 4.8%
  • Nissan was down 33.2%
  • Subaru was 12.6%
  • Toyota was down 11.3%
  • Volkswagen was down 10.3%

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Despite the many problems caused by the pandemic, some segments of the industry did especially well. One obvious trend was the continued growth of SUV sales. For the first time in history, sales of SUVs were more than 50% of the total light-vehicle market.

Pickup trucks, one of the segments in which domestic automakers remain dominant, continue to increase in popularity. Pickups represented 20% of the total market in 2020, up from a little over 18% in 2019.

Among the pickups, the outgoing Ford F-150 continued to hold its position as the most-sold vehicle in the United States, a title it has retained for 44 consecutive years. This occurred despite the fact that sales of the F-150 fell 12.2% in 2020. Ford's transition to an all-new 2021 F-150 and inventory shortages contributed to the drop. 

One beneficiary of the F-150's transition was the Chevrolet Silverado, which rose into the number two spot in sales on the strength of a 2.8% sales increase for the year. 

Toyota continued to boast the top-selling SUV and the top-selling car model for the year. The RAV4 compact SUV was the best-selling SUV with 430,387 sales, while the Camry midsize sedan was the most popular car with 294,348 sales in 2020.

In the final month of the year not only were sales on an upswing but the average price consumers paid for a vehicle was also up significantly. For December 2020 the average transaction price was $38,077, according to J.D. Power. The robust vehicle sales were spurred by equally robust sales promotions and incentives. The average incentive was $4,014 last month, J.D. Power research said.

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So what does the car market hold for American consumers? Experts suggest that new models and additional inventory of popular carryover models will offer consumers good buying opportunities even as sales increase.

"Consumer demand is very robust despite tight inventories that have plagued the industry since May," Jominy said. "In fact, pickup inventory started December at only 55% of December 2019's levels so we've been fighting with one hand behind our back. Therefore, as manufacturing constraints loosen the increased supply should lead to higher sales in 2021."

Vehicle manufacturers and others are the sources of information for this article. It was accurate on January 6, 2020, but it may have changed since that date.

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