The car shopping experts at Edmunds say the auto industry is on track for greater stability and healthier sales this year, forecasting 15.5 million new cars will be sold in 2021.
Edmunds analysts note this would represent a 6.5% lift over 2020.
"2020 was an incredibly tumultuous year for the industry, but some unique market conditions helped retail sales end up in a much stronger place than anticipated, and the good news is that these should serve as some decent tailwinds into 2021," said Jessica Caldwell, Edmunds' executive director of insights. "Despite the economic hardships faced by so many Americans during the pandemic, there's still a large population of well-off consumers who have been taking advantage of favorable financing conditions and sustaining healthy demand in the new car market."
Edmunds experts put together some of the biggest trends that they predict will shape the road ahead in 2021.
The new vehicle market will continue to grow more pricey and exclusive as the pandemic drives an income divide among Americans. New car prices are skyrocketing: In December 2020 the average transaction price for a new vehicle hit an all-time record high of $40,573.
Edmunds analysts expect this number to go up as affluent consumers benefiting from lower interest rates and healthy stock and housing markets continue buying bigger, more expensive new trucks and SUVs. At the same time, more affordable options in the new car market are growing increasingly scarce as automakers shutter their car lines, which Edmunds experts say will create a barrier to entry for many consumers and force them into the used car market.
COVID-19 vaccines will help keep auto sales steady but won't boost them dramatically. Unlike other industries such as airlines or entertainment, automotive sales are not expected to see a dramatic retail lift post widespread vaccination distribution---in 2020, retail sales were down only 8.6%.
However, Edmunds experts say that a return to an in-person work environment should help maintain sales, and they anticipate a boost in daily rentals in 2021, which generally make up 12% of new vehicle sales but sank to 7.4% in 2020.
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