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News Article

Car Sales Should Rebound in 2021 Study Finds

By MBN Staff | Wed, 12/30/2020 - 09:02

Industry experts have predicted that new car sales will rebound 9 percent globally in 2021, assuming that vaccines will be widely available by the middle of the year.

A report by IHS Markit this month forecasts that global sales of new cars will rise from below 75 million in 2020 to over 82 million in 2021 in an “optimistic” scenario while in Mexico, Deputy Director General of AMDA Guillermo Rosales said that sales of new cars could grow as much as 12 percent next year following a drop of 28.9 percent between January and November this year, should national vaccination be effective.

IHS Markit noted that fear of the COVID-19 virus is the driver behind next year’s predicted sales boom after several years of car sales falling worldwide.

“The pandemic appears to have boosted interest in private car ownership. Survey data from IHS Markit points to COVID-19 increasing demand for private car ownership in the US, West Europe and mainland China as first-time buyers expressed a need to reduce dependence on shared and public transportation,” the report stated.

Other studies bear this suggestion out. The BBC notes that the recent boom in sales of bikes was another consequence of commuters wanting to avoid the cramped conditions of public transport in a pandemic, with car sales also expected to benefit.

The report also noted that furlough schemes carried out by governments in some countries had given demand a boost and that the possibility of a quicker than predicted global recovery thanks to vaccines further strengthened sales potential. However, the report states the tightening of restriction measures, as seen in Mexico City at the moment, would undoubtedly deliver fresh blows to sales predictions.

IHS Markit’s forecast is welcome news to Mexico, where auto hubs like the El Bajio region have attracted significant investment in 1H20 despite the uncertainty created by the global pandemic. Even in 4Q20, while the pandemic has been in full swing and lockdowns took millions of cars off the roads, investment has still arrived to Mexico’s shores. Examples are Volkswagen’s US$240 million investment in its Guanajuato plant announced in December, following the company’s US$40 million investment in its Puebla plant to build the compact SUV Taos model that was announced in October

MBN Staff MBN Staff MBN staff