Written by / Zhu Lin
Edited / Tu Yanping
Design / Shi Yuchao
Source/Autonews, by Autonews Staff
When Kia cars dragged big "2021" numbers into the empty Times Square, we all naively thought there was nothing crazier than 2020.
Back then, chips (also meaning chips) were just a delicious but unhealthy snack. Cars and trucks no longer retain value after they leave the dealer's parking lot. No one can recite the Greek alphabet (the coronavirus variant is named after the Greek alphabet). Elon Musk is the third richest man in the world.
Over the past few decades, Tesla has become a trillion-dollar company. Public dealer groups have bought many retail stores just as they hoarded toilet paper in the early days of the pandemic. We're getting used to saying Stellantis.
There is also a global shortage of microchips, which automotive news staff overwhelmingly selected as the headliner of 2021. Remember when dealers used to have more than six new cars on the asphalt road around their showroom? Remember when car buyers laughed at only fools who would pay at label prices? Remember the car purchase subsidy?
What new madness will 2022 bring? Fasten your seatbelts, open your heated seats (non-GM customers only, GM has eliminated the heated seat option on many models due to chip shortages), and get ready to find out. Meanwhile, here's the biggest news of 2021 voted by Automotive News employees for 69 consecutive years.
No chips ah hey
Dealers have a large number of customers ready to buy vehicles, but rarely sell because automakers don't have access to enough microchips, which are critical to today's highly computerized cars.
As factory downtime increased and inventories dried up, incentives disappeared and vehicle transaction prices soared. On some high-demand models, dealers began labeling tens of thousands of dollars on their windows.
General Motors and other automakers decided to eliminate some popular features, such as heating seats, so the assembly line could continue to run. The good side is that dealers have made record profits for the second year in a row.
Dealer trading
In 2021, as larger groups become larger and more small dealers decide to exit, a new era of dealer consolidation begins.
Notable deals include: Lithia Motors' acquisition of The Suburban Collection, sale of Larry H. Miller Group to Asbury Automotive, Group 1's acquisition of Prime Automotive, and Sonic Automotive's acquisition of RFJ Auto Partners Holdings.
2021 is the largest year of dealer mergers and acquisitions in decades, and buying and selling consultants say there may be more large mergers and acquisitions in the future.
Electric vehicles accelerate
Electric vehicles still account for only a small fraction of total U.S. car sales, but that percentage has begun to rise rapidly as more battery-powered cars enter the market.
Tesla will become one of the best-selling luxury brands in the U.S. in 2021, but it also faces unprecedented competition as Ford Electric Horses and other new electric cars begin to erode Tesla's market share. Ford said it already needs to double its EV capacity over the next two years to meet market demand.
To make consumers feel that electric cars are better suited to their lifestyles and to undercut one of Tesla's strengths, several major automakers have ramped up investment in charging infrastructure.
The COVID-19 pandemic continues
With the advent of new variants of the coronavirus, companies have repeatedly postponed plans to return employees to work in the office. Ford Motor Company told 30,000 employees that they could continue to work from home indefinitely.
Disruptions to the automotive supply chain are occasional, but outbreaks within companies are rare. Detroit requires their Canadian employees to be vaccinated, but not so much in the United States.
Auto shows were held in Chicago and Los Angeles, but Detroit and New York went through another year without auto shows. Some auto shows — including Geneva, Toronto and Montreal — have canceled their 2022 shows.
Used car price disruption
Due to the shortage of new cars, used car prices hit a record high in 2021. Dealers look around the market for inventory in order to fill the space in front of the showroom. In some cases, they buy models that left the factory a year or two ago at the original price or higher.
Consumers who bought used cars a year or two ago found that they could resell used cars for a profit, while renters found a rare opportunity to monetize thousands of dollars in unexpected assets, which led several automakers to ban lease termination purchases through dealers of other brands.
Ablation of the internal combustion engine
This year, automakers drew a line and the days of announcing the internal combustion engine were numbered.
GM says it wants to sell only zero-emission light vehicles by 2035. Volvo, Mercedes-Benz and Cadillac are all ambitious for all-electric vehicles by 2030.
Even if automakers want to continue selling gasoline-powered cars, there are fewer places where they can do so. California, New York City, Canada and the European Union all plan to phase out internal combustion engine vehicles by 2035.
Farley is in charge of Ford
In his first year as Ford's chief executive, Jim Farley inspired Ford to develop specific electric vehicle plans, such as the F-150 Lightning ( which has received nearly 200,000 pre-orders ) and lucrative commercial vehicles.
Ford announced the largest production investment in the company's history, building a Blue Oval City in Tennessee and a battery plant in Kentucky.
The company hired Doug Field, Apple's automotive program leader, to guide emerging technologies and connectivity efforts under Farley's Ford Plus program. Even Wall Street is finally starting to buy in, and Ford's stock price has reached a 20-year high.
What is Stellantis?
Carlos Tavares combined the ruggedness of Jeep and Ram with the efficiency of Peugeot and Citroën to create the world's fourth-largest automaker.
The profitability of the new company has improved, and Tang Weishi said he will give all 14 of the company's 14 brands 10 years to prove themselves, regardless of Chrysler and other brands that are thought to be cut.
U.S. dealers, who have gone through a string of mergers over the years, say the latest merger is already creating a culture that is more focused on meeting customer needs than just selling as many cars as possible.
Tesla's trillion
After becoming the world's most valuable automaker in 2020, Tesla is worth more than the 10 automakers behind it combined in 2021.
It's the sixth company in history to have a market capitalization of more than a trillion dollars, and the soaring stock price has made Musk the richest man in the world. The electric car maker was profitable for the eighth consecutive quarter.
Meanwhile, the company's Autopilot and Full Self-Driving software is under investigation by federal regulators. Previously, the company had multiple accidents, and Tesla Motors did not see a single parked vehicle. The scrutiny didn't upset investors or stop Time magazine from naming Musk as Person of the Year.
Pickup trucks
As pickups get bigger and sturder year after year, the Ford Maverick and Hyundai Santa Cruz buck the trend.
With sedans falling out of favor, Ford and Hyundai see an opportunity to reintroduce small trucks that target customers who simply want an affordable, practical vehicle.
Both trucks were very popular early on the market, and they only needed to spend a few days at the dealership to follow customers home, many of them young pickup novices.