When it came to managing the COVID-19 pandemic, OEMs and suppliers did a lot of things right.
They realigned supply chains, managed finances, leaned into technology to stay connected with employees and customers, and re-imagined safety protocols to curb the spread of the coronavirus. Some even jumped into the medical production space to help meet domestic and global demand for ventilators, hand sanitizers and personal protective equipment.
All things considered, the industry has validated its resiliency in the wake of 2020.
Ultimately, though, what carried the industry through an incredibly difficult year was the unwavering demand for new vehicles. Sure, sales fell amid lockdowns, but they rebounded quickly when dealers opened their doors again. In fact, sales were better than expected, according to analysts.
And while that's good news for the industry, overall, it's also indicative of the demographics of new-car buyers.
The pandemic has and continues to disproportionately impact individuals and families with low and modest incomes. They are more likely to contract the virus, have underlying conditions that worsen the virus' impact, and are more likely to have lost jobs, making necessities unaffordable.
Feeding America said it served 4.2 billion meals between March and October 2020, and saw a 60 percent surge in demand for food.
So at the same time food banks around the country saw miles-long lines of cars with people waiting hours—or even overnight—to get a few groceries, new car dealers were struggling to keep enough inventory to meet demand for some vehicles.
Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, noted that in the latter part of last year auto makers even "pulled back on (incentives) because the inventories were so tight and the sales response was so strong."
That's because those with higher income levels were more likely to continue working at the start of the pandemic. Many did so remotely, which helped to mitigate their chances of getting COVID-19. Others had savings to carry them through a couple of difficult months.
Americans with higher income levels have banked a lot of money in the last year, too. S&P Global estimates that U.S. households saved $1.6 trillion more than they would have in a typical year. That adds up to a lot of pent-up spending power, which also bodes well for the auto industry in the years ahead.
It's easy to be excited about the perseverance demonstrated by the auto industry in the last 12 months, and that excitement is warranted. The rebound of the auto industry in 2020 and the outlook for the years ahead means a lot of jobs saved, and the economic impact of those jobs is important.
But as we celebrate, let's not forget the toll the pandemic has taken on our neighbors. We're among the lucky ones. Let's be sure we're taking care of others along the way.
