Automotive consulting firm AutoPacific’s recently released forecast of U.S. light vehicle sales predicts 2021 will reach a total of 15.7 million vehicles sold. Up from 14.6 million units sold in 2020, the improvement of over 1 million sales is powered mainly by a strong decrease in Covid-19 infections across the nation and associated economic recovery.
As Covid-19 vaccinations proliferate throughout the population, AutoPacific anticipates an economic recovery that will power automotive sales, including the return of fleet sales, of which daily rental fleets comprise the largest portion of. “As Americans begin to travel by air again, both for business and pleasure, demand for rental cars will return,” says AutoPacific Vice President Ed Kim. After daily rental car fleet demand dried up in 2020 as travel came to a grinding halt, AutoPacific expects a reversal in 2021, helping to driver the recovery of new vehicle sales.
In direct contrast to the recovery being driven by increased control over Covid-19 is a severe global semiconductor chip shortage that will lead to production losses around the world. “As virtually all new vehicles rely on chips due to their heavy computerization, plant closures are already in effect both in the U.S. and aboard due to lack of chip supply,” explains Kim. The chip shortage will have a negative effect on automotive sales recovery. As a result, used car demand will likely remain very strong through much of 2021, as it was in 2020 when Covid-related plant shutdowns resulted in very low new vehicle inventories.
Despite the ups and downs of the economy and vehicle sales challenges, consumer demand for truck products, which include crossover SUVs, traditional SUVs, pickups and minivans, will continue to climb. AutoPacific expects trucks to comprise 77.6% of total light vehicle sales volumes in 2021, compared to 76.4% in 2020. Continued improvements in fuel economy mean that consumers can have the SUVs they want without the fuel economy penalties that SUV ownership in the past entailed.
Battery electric vehicle (EV) sales are also expected to climb considerably in 2021 as both legacy and startup automakers roll out significant new all-electric products this year, finally providing Tesla with some real competition. AutoPacific forecasts approximately 375,000 EV sales in 2021, up from 262,000 in 2020.