New vehicle sales numbers in the U.S. are coming in, and what we suspected is real. The Covid-19 outbreak caused auto sales to dramatically fall. U.S. auto sales almost across the board are down, perhaps even more than we feared. Car and Driver and Bloomberg helped Gildshire unpack the numbers.
“I suppose we should expect these things.”
Indeed, because Hyundai reports a decline of 43% in March, and the automaker’s quarterly sales dropped by 11%. Only the Hyundai Ioniq saw an increase in sales compared to the first quarter of 2019. Randy Parker, sales head at Hyundai Motor America, had this to say.
“It goes without saying that the entire world is facing a tremendous challenge that is having a significant impact on business and our normal way of life. We know tough days are ahead, but we’re doing all we can to position the company to survive this and return to the growth trajectory we’ve been on.”
“What are the raw numbers?”
Fiat/Chrysler reports a 10.4% decline in first-quarter numbers, but their decline was partially slowed by a 7% uptick in Ram truck sales. Dodge dropped 20%, and Jeep fell 14%.
It is said that luxury brands are immune from temporary rough times. Not so in the case of the luxury automaker, Porsche. That company saw a 20.2% decline in the first quarter of 2020.
Analysts estimate that first-quarter sales will drop 6.2% at GM, 16.1% at Ford, and 9.9% at Fiat/Chrysler. Sales for 2020 in the United States are expected to fall steeply. Forecasters predicted 16-17 million new car and truck sales for the first year of the new decade. New forecasts land anywhere from 11.2 million to 14.5 million.
It isn’t only shelter-at-home orders that are keeping people from new car showrooms. Buyer confidence numbers have fallen the furthest since 2008, and unemployment claims for last week were the highest ever, as 3.3 million people reported themselves as “looking for work.” The week of March saw just 282,000 such claims.
To cushion the coronavirus impact, carmakers are offering incentives unseen since the 2008 recession. General Motors is offering 0% interest seven-year loans, for well-qualified buyers. Hyundai/Genesis will cover a half year worth of payments for buyers who lose a job due to the COVID-19 outbreak.
“How are the manufacturing numbers looking? Shelter-at-home and booming manufacturing don’t go together.”
They do not. Auto production in the United States has come to a full stop across the continent. Most automakers originally planned on stopping production for a couple of weeks at the most. But Ford and General Motors extended their work stoppage orders from 14 days to “indefinitely.” The Covid-19 threat is still high and shows no sign of lessening any time soon. In fact, more than 3,900 people have passed away from coronavirus in the United States, and nearly 190,000 people have tested positive.
The Covid-19 outbreak is the worst international medical disaster in many years. Stay-at-home warnings are into their second month, and are only spreading across the globe. Declining car sales is not the worst news in the world, but it is the choking canary in the coal mine about what is taking place. Stay home and safe. We will get through this together…six feet apart.