Pandemic, EVs, digital retailing and Tesla among top stories of 2020 – Automotive News
A month into 2020, Ford Motor Co. teased the new Mustang Mach-E with a video of exuberant millennials devouring chicken wings and cocktail shrimp directly out of its front trunk, in the space where an engine otherwise would have been. At the time, who would have guessed that the most unrealistic part of the scenario would be people from multiple households socializing indoors?
The coronavirus pandemic put the kibosh on partying with frunk shrimp and shut down North American auto production for two months. Despite the chaos, the Mach-E and a number of other electric vehicle launches still managed to happen. And automakers that initially scrambled to conserve cash to weather the crisis have deepened their commitment to EVs, even as consumers’ eagerness to buy and chill seafood in them remains uncertain.
The shrimp industry took another hit from the cancellation of every major auto show since March. But dealers, after some difficult months navigating the digital revolution that was suddenly thrust upon them, have plenty of reasons for socially distanced, well-ventilated celebrations after sales rebounded much quicker than feared and profits soared.
Those are some of the stories chosen by the Automotive News staff as the biggest of 2020. It was a year most would rather not relive — once was more than enough, thank you very much — but if Carlos Ghosn can contort himself into an instrument case, we can make the effort to uphold a 68-year tradition. Choosing No. 1 was easy. The tough part was remembering nine other things that happened since the devil-may-care days of enjoying underhood hors d’oeuvres.
The rapid spread of the novel coronavirus forced auto factories across North America to shut from March into May. Thousands of dealers and other small businesses received emergency federal aid. Office workers began working remotely — and many are expected to continue doing so well into 2021. With vehicle production down, automakers and suppliers pivoted to making much-needed ventilators, masks and face shields. When factories reopened, strict new worker health and safety protocols prevented any more big, disruptive outbreaks from occurring. Dealerships, some of which temporarily had to close all or parts of their operations under government order, reinvented themselves with new sales and service processes that minimize face-to-face interactions.
U.S. light-vehicle sales were hit hard by the pandemic before showing surprising resilience. After starting the year strong, they plunged to an annualized rate of just 8.8 million in April amid state- and local-government ordered dealership shutdowns. But sales shot higher again as homebound consumers flocked to generously discounted pickups and SUVs, and commuters wary of public transit opted for a privately owned vehicle instead.
The annualized selling rate returned to more than 16 million by September and has stayed in that range since, despite lingering vehicle shortages caused by the spring factory closings and a fall surge in coronavirus cases around the country.
After years of talking about the possibilities of online sales (and fast growth from new players such as Carvana), dealers hastily ramped up digital retailing efforts to keep selling vehicles even when showrooms were closed or consumers wanted to avoid visiting them. Public dealership groups launched online brands such as Driveway (Lithia) and Clicklane (Asbury). Auctions also pivoted to digital formats; KAR sees the change as a permanent safety and efficiency improvement, while Manheim has resumed limited in-person auctions.
While many products faced tough scrutiny, automakers leaned in to development and production of EVs. GM boosted its planned spending on electric and autonomous vehicles by 35 percent to $27 billion through 2025. Volkswagen committed $41.5 billion through 2025 just for battery-powered vehicles. Ford is spending $11.5 billion on EVs and hybrids through 2022. Hyundai and Kia are planning to spend a combined $43 billion through 2025 on EVs, purpose-built vehicles and other new technology. Upcoming models are focused on the most popular segments: crossovers, SUVs and pickups.
It started with the Geneva auto show’s last-minute cancellation and snowballed from there. New York, Los Angeles and Detroit were all showless in 2020. The Toyota-heavy Tokyo Olympics were pushed to 2021.
Automakers had to find new, digital ways to create excitement and awareness for new vehicles, while other events, including the Automotive News World Congress and 100 Leading Women celebration, became online happenings. The trend will continue at least into early next year, as CES and the NADA Show shift to digital formats.
Tight supplies in the face of surging demand for personal vehicles led to a run on new and used models, driving record profits across the dealer body and strong third quarters for most automakers, allowing them to restore their balance sheets after a bruising second quarter. Consumers who want a particular vehicle in a certain color or configuration have had to pay closer to sticker to get it.
Two former presidents of the union are now among the 15 people who have been charged and convicted of various forms of corruption. But the UAW managed to avoid the worst-case scenario of a federal takeover. Instead, the Justice Department will spend six years monitoring the union’s activities to ensure everything’s on the up and up, and rank-and-file members will decide whether to give themselves the authority to directly elect future leadership for the first time. Meanwhile, General Motors kept brewing up drama in court as it attempted to hold Fiat Chrysler Automobiles responsible for bribing UAW officials, without success.
The EV company run by Elon Musk — now the world’s second-richest person — became the most valuable automaker by far, eclipsing longtime No. 1 Toyota by 150 percent at the start of December, on the back of five straight quarters of modest profits powered by selling emissions credits. The California company opened its first plant in China and started construction in Germany and Texas, and Tesla remains the fastest growing auto brand, in the U.S. as well as worldwide.
Several dealerships sustained damage during protests across the country after the killing of George Floyd, an unarmed Black man, by Minneapolis police. The civil rights movement also sparked statements on social responsibility from GM, Ford, Waymo and other companies as well as new or renewed efforts to improve diversity in automotive leadership by the NADA board and Women of Color Action Network.
Ghosn’s made-for-Hollywood caper happened too late in 2019 to make last year’s list, but he just slipped in under the wire at No. 10 this time. While he’s been in Lebanon telling his story, launching a management course and possibly selling a screenplay, his former human resources chief was put on trial and his rescuers have been in jail fighting extradition to Japan.