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Cox Automotive Forecast: Slow Second Half Holds Full-Year Sales Below 15 Million for Second Straight Year


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Article Highlights

  1. Full-year 2021 auto sales in the U.S. are forecast by Cox Automotive to finish near 14.9 million units, an increase of approximately 2.5% from 14.5 million in 2020.
  2. December sales volume is expected to drop 32% year-over-year, as new-vehicle inventory remains well below historic norms, slowing typical year-end sale surge.
  3. Toyota Motor Company, with strong results from both Toyota and Lexus brands, is forecast to pass General Motors and become top seller in the U.S. market.

UPDATED, Jan. 4, 2022 – Toyota beating General Motors in 2021 is a significant event and will be the dominant headline of 2021 sales reporting. General Motors had been the No. 1, top-selling automaker in the U.S. for generations, so Toyota on top is noteworthy. In all, we expect 2021 to finish near 15 million units, up only 3.5% from 2020. December sales appear to be finishing slightly above our expectations. Tight inventories held back even stronger sales in December, but improvements in supply may have contributed to a slightly better market performance at the end of the month. 

Still, in 2021, sales results are not necessarily the important numbers to consider. Last year, inventory and transaction price were the data points worth watching, as both moved in historic directions and likely impacted the industry for years to come.

We believe consumer demand held up throughout the year, but inventory did not. In the second half of 2021, having the right product, in the right color and trim, in the right metro market was a challenge for all automakers. Those with smaller dealer networks, better supply chains, and the right portfolio of products benefitted the most – Toyota, Hyundai, Kia, to name a few.

According to our vAuto Available Inventory data, industry days’ supply was over 70 in the early weeks of 2021 but then dropped to near 30 in Q4. The active supply of new vehicles was well over 2.5 million in January. By December, it had fallen below 1 million. These numbers drove the sales results and taught automakers and dealers alike new lessons in inventory management. In many ways, General Motors was not beaten by Toyota in 2021. General Motors lost the production war.

As with inventory, pricing was the other important data point in 2021. Record-high average transaction prices (ATPs) were established month after month according to data from our Kelley Blue Book team. In January 2021, the ATP was just over $41,000. By November, ATPs had jumped over $46,000, an increase of more than 10% in less than a year. Used-vehicle prices increased even more quickly.

Yes, sales volume is a good gauge of industry health, and the winners and losers are always an interesting story. Congratulations, Toyota! But 2021, more than ever, was not about sales volume and sales rankings – 2021 was a year when inventory management and price gains were the real headlines.

ATLANTA, Dec. 28, 2021 – New-vehicles sales in December are expected to reach 1.10 million units, a drop of 32% compared to December 2020, according to a forecast released today by Cox Automotive. The December pace of auto sales, or seasonally adjusted annual rate (SAAR), is expected to finish near 11.4 million, down 30% from the 16.3 million sales pace a year ago. December 2021 will be the slowest pace since May 2020, when the country remained mostly closed during the first wave of the COVID pandemic.

New-vehicle sales in 2021 are now expected to finish near 14.9 million, according to Kelley Blue Book vehicle counts, up 2.5% from the 14.5 million in 2020 but well below the five-year average of 17.3 million the industry recorded from 2015-2019, a historic run of robust sales.

“While sales in the first half of 2021 were relatively strong, the industry ran out of vehicles, and sales stalled in the second half,” noted Cox Automotive Senior Economist Charlie Chesbrough. “Total sales in the second half of 2021 were the slowest in a decade. Demand is healthy, but supply and production disruptions kept the industry in check. You can’t sell what you don’t have.”

Typically, according to Cox Automotive vAuto Available Inventory data, new-vehicle inventory across the U.S. would be close to 3.5 million units, providing shoppers a wide variety of choice and competitive pricing. Since August, however, inventory has been holding steady at approximately 1 million units, limiting choice and driving prices higher. Average transaction prices in November set a record for the eighth consecutive month. Auto sales in the first half totaled 8.35 million units, a strong pace that the left the industry unable to refill the pipeline. Sales in the second half of 2021 will finish closer to 6.59 million.

“Heading into 2022, we believe the supply situation will improve but it will take time to restock the shelves at dealerships,” added Chesbrough. “We expect modest gains in new-vehicle sales in the first quarter, and by the second half of the year a much more robust market should emerge.”

2021 will be the year Toyota Motor Company takes the crown as the best-selling automaker in the U.S.  Toyota has successfully managed tight inventory all year. With solid sales for both its Toyota and Lexus brands, Toyota will pass General Motors to become the largest seller of automobiles in the U.S., a historic achievement to say the least. G.M. has annually been the top automaker in the U.S. dating back earlier than any available Cox Automotive data set. 

December 2021 Sales Forecast Highlights

  • New-vehicle sales are forecast to fall by more than 500,000 units from last December, but increase nearly 80,000 from November 2021.
  • The SAAR is forecast to be 11.4 million, down from November’s 12.9 million, and down significantly from last December’s 16.3 million pace.

Full-Year 2021 Sales Forecast Highlights

  • New-vehicle sales are forecast to increase 2.5% from 2020 and reach 14.9 million units.
  • Auto Sales in Q4 will be down 24% from last year, holding full-year sales below 15 million.
  • Toyota Motor Company, with its Toyota and Lexus brands, will be the top seller in 2021.

All percentages are based on raw volume, not daily selling rate. There were 27 selling days in December 2021 and 28 selling days in December 2020.

Cox Automotive Industry Insights Webcast: January 13th, 2022

Join the Cox Automotive Industry Insights Webcast hosted by Chief Economist Jonathan Smoke and the Industry Insights team on Thursday, January 13, 2 p.m. EST. During this 90-minute session, the team will review how the auto industry performed in 2021 and how the Cox Automotive team sees the industry progressing in the new year.

About Cox Automotive
Cox Automotive Inc. makes buying, selling, owning and using vehicles easier for everyone. The global company’s more than 27,000 team members and family of brands, including Autotrader®, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, VinSolutions®, vAuto® and Xtime®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five continents and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with annual revenues of nearly $20 billion. www.coxautoinc.com

Media Contacts:
Mark Schirmer
734 883 6346

Dara Hailes
470 658 0656

Media Contacts:
Mark Schirmer
734 883 6346

Dara Hailes
470 658 0656

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