Monday, 18 January 2021 22:56

Auto Industry ‘In Much Better Place,’ But Price Surge Likely to Continue

Written by Paul A. Eisenstein, The Detroit Bureau
Tesla was one of only three automakers to post an increase in U.S. sales in 2020. Tesla was one of only three automakers to post an increase in U.S. sales in 2020.


...Model Y buoyed the automaker’s overall volume.


Tesla itself is looking for a rapid increase in sales, especially with new products like the Cybertruck coming, along with two new factories in Berlin and Texas. But the EV upstart might find things a bit tougher going forward, cautioned Cox analyst Michelle Krebs.


“Tesla may face its first competitive challenge” from products like the Hummer, ID.4 and Ford Mustang Mach-E, said Krebs. She acknowledged there have been dire predictions about Tesla in the past but, she added, “We mean it this time.”


At the other end of the spectrum, Nissan was the big loser from a sales standpoint, its U.S. share dropping a sharp 1 point. The real test will come this year with the launch of all-new versions of both the Sentra sedan and Rogue crossover, Cox analysts said.


One other trend industry analysts will be watching in 2021---as will consumers---is the steady climb in vehicle pricing which is now approaching a $40,000 average. Combined with tightened credit, the analysts noted, that has driven many buyers out of the new car market. In turn, that has both spurred demand---and driven up prices---in the used vehicle market.


In fact, upward pricing pressure may hit the “previously owned" segment hardest going forward because the 2020 sales slump means there will be fewer used vehicles available.


“That will exacerbate pricing pressures for the next few years,” warned Smoke.


We thank The Detroit Bureau for reprint permission. 


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