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Despite chip paucity, AutoNation predicts strong US sales this year

February 19, 2021
AutoNation Inc., the country’s largest auto dealer chain, expects U.S. sales of new cars and trucks to hit 16 million vehicles this year, rebounding on a pandemic-fueled increase in demand for personal transportation.
Chief Executive Mike Jackson predicts the growth despite disruptions to vehicle production caused by a global semidconductor shortage and lingering inventory issues from pandemic-related shutdowns last year. He expects the seasonally-adjusted rate of U.S. new-car sales to grow 7% this year, up from 14.5 million vehicles in 2020, which was the lowest since 2012.
"The demand is higher than that, but I think it’ll be constrained by production," Jackson said in a phone interview. "The situation is very opaque, no one knows exactly how this is going to unfold, production is definitely unpredictable."
Vehicle production by carmakers this year has been pinched by the shortfall in supplies of chips, as semiconductor makers have allocated more capacity to consumer products than cars. Now snowstorms are adding to carmakers’ woes by forcing plant shutdowns in states in the central part of the country.
Industry executives and analysts predict strong consumer demand will continue this year and expect a return of commercial fleet sales as local officials distribute the Covid-19 vaccine.
"While the coronavirus was something that no one in the auto industry expected, the industry rallied and adapted to the new state of play," Patrick Manzi, chief economist at the National Automobile Dealers Association, said in a statement. "Looking forward, we are optimistic about the continued recovery of the new light-vehicle market."