Las Vegas, NV, January 22, 2021 (GLOBE NEWSWIRE) – Unsurprisingly, auto manufacturers and dealers in America are looking for a recovery in sales after a very disappointing year of 2020. Sales on all license plates have dropped by an average of 15 percent compared to 2019 numbers. However, industry sources are pointing to the 5 percent increase that occurred during the fourth quarter as a welcome sign of better luck in 2021. This makes utilities happy Don Forman Nissan hopeful for the coming months.
Analysts point to the effects of the global pandemic as the main cause of the collapse of sales in 2020. As the virus continues to spread across the globe, most informed industry observers say that automakers are counting heavily on the success of many new vaccines are finally being implemented in the general population.
Although not really the virus, but the public health measures put in place to deal with the virus that have been the real driver of the drop in sales, with many companies closed entirely or operating at reduced capacity, there has been less need for new vehicles to expand fleets or replace old units due to maintenance considerations. Likewise, the public spent more time at home and less time going to work, running errands or taking a vacation.
The expectation of the entire sector is that these factors have not reduced the common demand for replacement vehicles, but only postponed. As soon as everyone can resume a more normal lifestyle, the auto industry will be waiting for them with open arms and many new fine products. Until that time comes, it has been a struggle to keep the manufacturing and sales infrastructure intact for the time when it will finally be needed at full capacity again.
Of course, the decline in sales in 2020 was not evenly distributed. Rural concessionaires suffered less than urban concessionaires. As a result, they are likely to gain less from the expected 2021 increase in sales. More stable demand in 2020 means more stable demand in 2021 for them. In contrast, urban sellers have a pent-up demand starting in 2020, which will be satisfied with higher sales in 2021.
The good news for the sector as a whole is that there are far more urban than rural customers. Much still depends on an underlying economic recovery coupled with the improved effectiveness of the vaccination program. There are many people who want to buy a new car this year. Still, the physical manifestation of that demand remains dependent on whether they return to work or, at least, return to work full time before they can confidently pull the trigger on a major purchase of any kind.
The feeling is what really counts. Once people believe they are safe and recovery is underway, sales should return to their normal pace. At least, this is the president’s view Don Forman Automotive, which highlights the effect of government stimulus programs to boost economic growth and the prompt availability of vaccines as factors that will accelerate sales.
Mr. Forman anticipates that this will lead to a narrowing of incentive programs as the recovery accelerates. At the moment, automakers are eager to keep inventory moving and make room for the expected increase in deliveries once the weather gets warmer. In his flagship Don Forman Nissan, he saw the same level of drop in sales on average as most other brands, but he knows that cyclical declines in car sales are always followed by a jump across the depression . Based on his many years in the industry, he knows that the easiest way to see that the recovery is in full swing is when dealer incentives start to wane. Smart shoppers can get better deals now than they can find later.