Back to “Normal”? Not So Fast
Getting plants operating as they had isn’t going to happen overnight. And sales recovery—years
Although it seems as though there seems to be a consensus that everything is reopening and things are quickly becoming what they were, including in the vehicle production space, according to Sam Fiorani, vice president, Global Vehicle Forecasting, AutoForecast Solutions, in a recently posted piece on YouTube, getting “everything back to ‘normal’” in production is probably going to take a year or so.
The firm anticipates that North American vehicle production will be 12.1-million vehicles in 2020.
As for U.S. sales, its number is 12.9-million units. Pre-pandemic the firm had estimated sales of 16.8 million. The 2019 sales number was 17.1 million.
While there is expected growth for 2021, the U.S. sales number will be on the order of 14.8 million.
Fiorani said that he doesn’t see the number getting back to 17 million units until about 2025.
A Quick Take
Yes, the industry needs to be back up and running. But this is something that needs to be done safely, because the reopening of bars, restaurants and barbershops notwithstanding, the coronavirus is still out there even though many people would rather not think about it. (If you have any doubt about that, look at this.)
Another thing that shouldn’t be overlooked is, as Fiorani pointed out, there needs to be people to buy the new vehicles, and in order for that to happen, there needs to be jobs such that there is disposable income. Another challenge that isn’t going to be overcome in an instant.
If heritage means anything in this industry, then it is surprising that Buick doesn’t make more of its history because the story of the early years of the company is nothing short of astonishing.
What happens if that $2.29 a gallon goes up by a couple of bucks a year from now? How are the pickup, SUV and crossover sales going to be then?
Often when there are vehicles that have ceased production and are in the process of being completely moved out of the system there are sales numbers that look like this: Honda Insight: June 2016, 9; June 2015, 126; % change: 93.1% Sometimes there is a vehicle that has just gone into production and it catches the sales at just the right time so that there are numbers that look like this: Honda Ridgeline: June 2016, 2,472; June 2015, 7; % change: 33,856% OK.