_Happy boy Posted February 10, 2021 Posted February 10, 2021 Zacks Equity Research Wed, February 10, 2021, 3:08 PM·4 min read More content below More content below More content below More content below More content below F -2.98% HMC -0.30% GM -5.92% TM +1.49% TSLA -5.71% The auto industry had to bear the brunt of the COVID-19 pandemic in 2020 as lockdowns led to a fall in demand. However, the industry looks poised to rebound this year. Notably, per a report by IHS Markit, global light vehicle sales are expected to increase 9% in 2021, as industry demand levels spur up. The report stated that the recovery will depend on the path of the pandemic and how governments are delivering on the vaccine programs. Also, the IHS Markit report hints at normalization of the situation from the middle of 2021. On a positive note, the report stated that online sales and contactless delivery programs have helped in offsetting the impact of restrictions on registrations. The report also stated that the production of light vehicles is expected to rebound globally as manufacturing operations have been largely restored in most regions. Notably, IHS Markit forecast global light vehicle production to increase 14% in 2021. In the United States, auto makers have been making a comeback from the second half of 2020. S&P Global Ratings stated that factors like ultra-low interest rates, low gas prices and strong housing starts, which have a historical correlation to auto sales, helped in boosting demand and in lowering sales incentives for auto makers, as quoted in an American Journal of Transportation article. The article also stated that shifting away from public transportation along with a flight to suburbs during the pandemic contributed to the demand for vehicles. Meanwhile, electric vehicles (“EVs”) are also set to gain further importance in the auto industry as the world continues to fight climate change. Notably, Canalys stated that global sales of EVs increased 39% in 2020, to reach 3.1 million units, as mentioned in a Business Wire article. Moreover, the article stated that EVs are estimated to account for more than 7% of worldwide new car sales in 2021 compared to almost 5% in 2020. 5 Stocks to Watch Out for 1
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