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Media Group Online, Inc.
June 2021 www.mediagrouponlineinc.com
Maneuvering Through the Market Madness
Automakers, dealerships and consumers are all trying to find their
way through the current market madness. For automakers, the
microchip shortage continues to dominate their operations, as Consumers’ particular form of market madness is the average
2.99 million vehicles were removed from global production and new-vehicle price increased 2.2% YOY for April 2021, to
55,000 from North American production for the week of 5/24/21. $40,768, which is an increase of $864, although the increase
from March 2021 was just 0.23%, or an additional $92.
Of the North American total, almost half (25,000) were
Volkswagens, with Stellantis (formerly FCA Automotive) Despite the maddening situation, all the brands in the abbreviated
eliminating approximately 19,000 and Toyota 8,300. listed on page 4 experienced sales increases during May 2021
– and most were in double-digits. Morgan Stanley estimates
General Motors is reporting some optimism related to the chip the May SAAR (seasonally adjusted annual rate) will reach 17.1
shortage, as it plans to re-open all its plants within 30 days. million while J.D. Power and LMC forecasted demand during
Despite the light at the end of the chip tunnel, some dealerships May will set a record at 1.39 million light vehicles.
have few, often less than 10, unsold vehicles on their lots and
some are expecting shipments of less than 50 vehicles during
the each of the summer months.
Sticker Prices
Don’t Shock Consumers
Because of the chip shortage, some car dealers are selling
new vehicles at more than the published sticker prices. Such
a practice is typically rare, but during the first 26 days of
May, 69% of new-vehicle purchases were almost or more
than the MSRP, compared to 41% during May 2020 and 36%
during May 2019.
For many dealers, it’s simply a supply-and-demand issue, Among dealers who won’t sell new vehicles at more than their
with many vehicles sold before trucks can deliver them. The MSRPs, they are more concerned about maintaining and
inventory shortage and the robust consumer market have creating long-term relationships with customers than making a
resulted in a record $3,245 total profit per vehicle, according to few extra dollars. Many dealers are paying very little floorplan
late-May 2021 data from J.D. Power. interest and spending less on advertising, which allows them to
keep customers happy with the best prices.
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June 2021 www.mediagrouponlineinc.com
MARKETING FORWARD
Younger Adults Are Driving the Market
Considering the current auto market madness, it may seem Gen Xers continued to have the largest share of new-vehicle
unsurprising that an oft-cited trend has reversed its course. registrations at 29.9%, but only increased 0.02% from Q4
Gen Zers and Millennials accounted for the largest increases in 2019. Older adults’ shares didn’t increase much and even
new-vehicle registrations during Q4 2020, at 4.1% (1.1% during decreased slightly for some age groups.
Q4 2019) and 28.1% (26.4% during Q4 2019), respectively.
For years, automakers and dealers were concerned younger
adults showed less interest in vehicle ownership, but possibly
their pandemic experience caused them to realize the
importance of owning a vehicle. Public transportation and the
various transportation network companies (Uber, Lyft, etc.)
were either not operating or operating at very low levels.
ADULTS 18+ WHO WILL PAY $30,000 OR MORE FOR
THEIR NEXT VEHICLE, BY GENERATION, 2020
Generation Percent
Gen Z 7.7%
Millennials 33.3%
Gen X 30.7%
Baby Boomers 25.3%
Silent Generation 3.1%
Based on The Media Audit’s 62-Market 2020 Aggregate Survey
Auto Credit Market Remains Solid
If dealers had more vehicles to sell, then the current good Although more than 35% of new vehicle loans were for more
news in the auto credit market would result in even more than 72 months during the quarter, the credit markets aren’t
sales. Experian reports consumers had higher average credit concerned because the delinquency rate (payments overdue
scores (663) whether they were buying a new or used vehicle by 60 days) was just 0.54%, compared to 0.67% during Q1
during Q1 2021 – and loan delinquency rates decreased. 2020 and 0.68% during Q1 2019.
Consumers were still buying pickup trucks and SUVs in large ADULTS 18+ WITH A VEHICLE LOAN, BY AGE GROUP
numbers and financing large amounts. Of all new vehicles AND HOUSEHOLD INCOME, 202
financed during Q1 2021, 56% were SUVs and 17% were
Household
pickup trucks and the average amount financed for all new Age Group Percent Percent
Income
vehicles was $35,392, compared to $33,833 during Q1 2020.
Less than
18–24 5.6% 14.8%
$35,000
$35,000–
25–44 34.8% 31.9%
$75,000
$75,000–
45–54 23.2% 38.3%
$150,000
$150,000 or
55–74 29.9% 15.0%
more
Based on The Media Audit’s 62-Market 2020 Aggregate Survey
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June 2021 www.mediagrouponlineinc.com
ROAD SIGNS
image source: www.ford.com
The Deeper Question
Another question the announcement begs is whether Ford was
of Ford’s F-150 Lightning EV clever enough to use the Lightning as an opening gambit for
more widespread EV adoption to boost the sales of future Ford
Likely, Ford’s primary motivation for designing, building and
EVs coming to the market. After all, if a pickup truck owner
launching its Ford F-150 Lightning electric pickup truck was
(stereotypes notwithstanding) is willing to buy a truck EV, then
the potential competition from Tesla and Rivian as well as
consumers may be more likely to buy other EV models.
robust EV investments at Ford’s traditional rivals.
Ford’s other strategic move is the price of the base model of
During the first 12 hours after unveiling the Lightning May
the Lightning is $39,974, which is thousands less than its initial
19th, Ford had received 20,000 reservations for a vehicle
competitors: Tesla’s Cybertruck, GMC’s EV Hummer and
that won’t be available until early 2022. The deeper question
Rivian’s EV pickup. These trucks have many attractive features,
is whether these reservations are coming from traditional and
but they don’t have the track record of Ford or the F-150, which
loyal F-150 fans or is this first significant indication Americans
suggests Ford may have initiated one of the greatest coups in
are ready to embrace EVs.
automotive history.
New Moves Across the Industry
The people at Ford may be excited about the successful launch
of the F-150 Lightning, but it announced June 3rd the addition of
the Maverick, a new small pickup, which could be available by the
end of 2021. As the price of new pickup trucks increases, Ford
expects the Maverick to be a lower-cost option for consumers
who want a pickup truck, but not a full-size model.
7-Eleven knows the future of transportation is electric, so it will
be increasing the number of charging stations at its locations,
adding a minimum of 500 to 250 convenience stores in the US
and Canada during 2022.
Many EV startups are jockeying for large orders for commercial
electric vans from the largest delivery companies, such as UPS,
FedEx, DHL and Amazon. An order for thousands of vans would
allow EV startups to advance quickly. Arrival already has an order
for as many as 10,000 vans from UPS and Rivian is building
100,000 vans for Amazon.
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June 2021 www.mediagrouponlineinc.com
MONTHLY AUTOMOBILE SALES CHART
NOTE: General Motors, Stellantis and Tesla announce their light-vehicle sales quarterly instead of monthly; however, Ford is now reporting monthly again. As of
January 2020, BMW Group, Nissan North America, Volkswagen Group, Jaguar Land Rover and Mercedes-Benz also decided to report sales only quarterly. They
will publish their Q2 2021 sales during early July 2021. Their brands are not included in this month’s sales table.
% Change from % Change from
Rank Auto Brand May 2021 2021 Year to Date
May 2020 2020 Year to Date
#1 Toyota 212,447 +46.7% 953,543 +44.6%
#2 Honda 158,662 +43.4% 607,888 +40.2%
#3 Ford 152,377 +3.6% 831,273 +10.7%
#4 Hyundai 93,745 +59.0% 349,914 +53.1%
#5 Kia 80,298 +75.3% 310,025 +43.9%
#6 Subaru 56,558 +8.8% 278,373 +30.6%
#7 Mazda 42,187 +69.2% 156,562 +51.2%
#8 Lexus 29,724 +48.6% 131,005 +52.1%
#9 Acura 18,153 +75.5% 72,500 +65.1%
#10 Volvo 13,221 +38.9% 51,496 +56.7%
#11 Lincoln 8,143 +5.0% 44,021 +15.3%
#12 Genesis 3,728 +176.1% 15,244 +149.5%
Toyota Motor Corporation 242,171 +46.7% 1,084,548 +45.5%
American Honda Motor Company 176,815 +46.2% 680,388 +42.5%
Hyundai-Kia Automotive Group 174,043 +66.1% 310,025 +43.9%
Ford Motor Co. 160,520 +3.7% 875,294 +10.9%
TOTAL* 865,515 +36.9% 3,786,600 +35.0%
Source: Automotive News, June 2021
Sources: Automotive News Website 6/21; Cox Automotive Website 6/21; The
Media Audit Website 6/21; Wards Auto Website 6/21; CNBC Website 6/21;
© 2021 Media Group Online, Inc. All rights reserved. Wired Website 6/21; CS News Website 6/21; Reuters Website 6/21.
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