Auto gross sales helped get the economic system off to a very good begin in 2021.
Within the first months of 2021, what was good for the auto business was decidedly good for the American economic system.
Spending on motor automobiles and components rose nearly 13 p.c within the first quarter, making a giant contribution to the rise in gross home product, the Commerce Division reported Thursday. Robust gross sales of latest and used automobiles have been propelled by customers who had delayed purchases earlier within the pandemic and by others who — due to the virus — needed to rely much less on public transit or shared transportation companies like Uber.
Two rounds of stimulus funds since late December have been a giant issue. Low rates of interest, available credit score, rising dwelling values and inventory costs, and powerful trade-in values for used fashions additionally eased the trail for customers.
The truth is, demand within the first quarter was sturdy sufficient that the auto business was in a position to publish wholesome outcomes regardless of a scarcity of pc chips that compelled short-term shutdowns of many automobile vegetation.
The variety of new automobiles and light-weight vehicles bought elevated 11 p.c from the comparable interval a yr earlier, to three.9 million, based on the auto-sales knowledge supplier Edmunds.com.
On Wednesday, Ford Motor reported it made a $3.3 billion revenue within the quarter, its highest complete since 2011. Whereas it produced 200,000 fewer automobiles within the quarter than it had deliberate, the typical promoting worth of Ford fashions rose to $47,858, 8 p.c greater than within the first quarter a yr in the past, Edmunds reported.
The mixture of sturdy shopper demand and tight inventories — partly a results of the chip scarcity — has produced one thing of a dream state of affairs for auto retailers. At AutoNation, the nation’s largest chain of dealerships, many automobiles are being bought close to or at sticker worth even earlier than they arrive from the manufacturing unit.
“I’ve by no means seen a lot preselling of shipments,” stated Mike Jackson, the chief government. “These automobiles are coming in and going proper out.”
Within the first quarter, AutoNation’s income jumped 27 p.c, to $5.9 billion, and the corporate reported $239 million in revenue. That was a turnaround from a loss a yr in the past, when the pandemic crimped gross sales and compelled AutoNation to shut shops.