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How Don Forman Nissan Knows Recovery Is Coming

Don Forman
·3-min read

Las Vegas, NV, Jan. 22, 2021 (GLOBE NEWSWIRE) -- Not surprisingly, America's car manufacturers and dealers are looking for a rebound in sales after a very disappointing 2020. Sales across all nameplates fell on average 15 percent from the 2019 numbers. However, industry sources are pointing to the 5 percent uptick that occurred during the fourth quarter as a welcome harbinger of better luck in 2021. This makes dealerships like Don Forman Nissan hopeful for the coming months.

Analysts point to the global pandemic's effects as the primary cause of the 2020 collapse in sales. While the virus continues to rage across the planet, most informed industry watchers say that the car companies are counting heavily upon the many new vaccines' success finally being rolled out into the general population.

Although it is not actually the virus but the public health measures put in place to deal with the virus that have been the real driver of lower sales, with many businesses either shut down entirely or operating at reduced capacity, there has been less need for new vehicles to expand fleets or replace aging units due to maintenance considerations. Likewise, the public has spent more time at home and less time commuting to work, running errands, or vacationing.

The industry-wide expectation is that these factors have not reduced the ordinary demand for replacement vehicles but merely deferred them. Once everyone can resume a more normal lifestyle, the auto industry will be waiting for them with open arms and many fine new products. Until that time comes, it has been a struggle to keep the manufacturing and sales infrastructure intact against the time when it will finally be needed at full capacity once again.

Of course, the decline in 2020 sales was not evenly distributed. Rural dealerships suffered less than their urban counterparts. They will probably gain less from the anticipated rise in 2021 sales as a result. Steadier demand in 2020 means steadier demand in 2021 for them. In contrast, the urban sellers have pent-up demand from 2020 that will be satisfied with higher sales in 2021.

The good news for the industry as a whole is that there are many more urban customers than rural ones. A lot still depends on an underlying economic recovery coming in tandem with the vaccination program's improved efficacy. There are a great many people who want to buy a new car this year. Still, the physical manifestation of that demand remains reliant on them getting back to work or at least getting back to full-time work before they can confidently pull the trigger on a major purchase of any kind.

The sentiment is what really counts. Once people believe that they are safe and recovery is underway, sales are expected to move back into their normal track. At least, that is the view of the president of Don Forman Automotive, who highlights the effect of government stimulus programs to kickstart economic growth and the ready availability of vaccines as factors that are going to accelerate sales.

Mr. Forman anticipates that this will lead to a narrowing of incentive programs as recovery picks up the pace. Right now, carmakers are anxious to keep inventory moving and clear space for the anticipated surge in deliveries once the weather gets warmer. At his flagship Don Forman Nissan, he has seen the same level of sales decline on average as most other brands but knows that cyclical declines in car sales are always followed by a jump on the other side of the trough. Based on his many years in the industry, he knows that the easiest way to see that the recovery is in full swing is when dealer incentives start to throttle down. Smart buyers can get better deals now than they will be able to find later.