Yahoo News U.S. Auto Sales See a Steep Decline amid Coronavirus Pandemic
Stay-at-home orders prompted by the spread of COVID-19 have brought economies to a screeching halt, and first-quarter auto sales are the first indicators of how detrimental the pandemic has been on car buying.
FCA has reported a quarterly decline in U.S. sales of 10.4 percent; GM, a decline of 7.1 percent. Hyundai saw its March sales drop by 43 percent.
Tesla, a company which only reports quarterly global sales, had record-setting first quarter, a divergence from most of the field.
U.S. new-vehicle sales for the first quarter and the month of March are rolling in, and the first indications are that the spread of COVID-19 has led to massive downturns in buying.
This past quarter, Ford had a sales decline of of 12.5 percent, a drop that was buoyed by truck sales as they only fell by 5.4 percent. Lincoln saw an uptick in sales of 2.3 percent, a move that was pushed by the Aviator coming to market in the last year.
FCA reported a 10.4 percent decline in first-quarter sales, a decline cushioned by a 7 percent increase in Ram pickup truck sales. Ram was the only FCA brand to see an increase in sales through the last quarter; Dodge dropped 20 percent and Jeep fell 14 percent.
General Motors saw a decline of 7.1 percent in first-quarter sales. Of GM's brands, Buick took the bulk of the decline with sales falling 34.7 percent this past quarter. Pickups lessened the blow for GM, with the GMC Sierra and Chevy Silverado seeing quarterly sales increases across both heavy- and light-duty lineups.
Sales dropped off similarly for Toyota, falling 36.9 percent in March for the automaker and 8.8 percent for the first quarter. No model in the Toyota or Lexus lineup was spared from the decline.
"As the pandemic rolls across America, consumers’ interest in big ticket purchases like vehicles has all be disappeared," Charlie Chesbrough, a senior economist at Cox Automotive, said in a note. "The second quarter will be the real measure of COVID-19’s impact on the economy and the auto industry."
Tesla only reports quarterly, global sales--U.S. sales data is not available, beyond estimates--had a record first quarter. Across the world, the EV-maker delivered 88,400 vehicles, which surpassed estimates by around 10,000 vehicles. That said, sales were down 21 percent as compared to the fourth quarter of last year.
Hyundai reported a year-over-year decline of 43 percent for the month of March, while the company's quarterly sales declined by 11 percent. With the exception of models that are new for this year, such as the Venue, only the Ioniq saw a quarter-over-quarter increase in sales.
"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," Randy Parker, head of sales for Hyundai Motor America, said in a statement. "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."
In the first quarter of 2020, Nissan—including Infiniti—saw a sales decline of 29.6 percent. Infiniti saw sales drop across the board with the exception of the QX50, while Nissan had sales increases for the Kicks, Murano, and Pathfinder. Nonetheless, Nissan's popular Rogue took a hit of 36.3 percent this past quarter.
Volkswagen, an automaker that recently switched to reporting quarterly, released both first-quarter and March sales data. In March, the German manufacturer saw sales fall 42 percent, and in the quarter, sales declined 13 percent. With the exception of the Golf R and the Golf SportWagen, all models saw a downturn in sales.
For both Honda and Acura, sales dove 48 percent in March and 19.2 percent in the first quarter. Over the quarter, the Fit, Ridgeline, and Passport had sales grew from last year. Genesis saw sales fall 33.2 percent in March and 5.9 percent in the quarter. Sales for the G90 grew last month, making it just one of a few vehicles to see year-over-year gains.
Kia's sales took a less abrupt downturn than they did for other manufacturers. In March, sales fell 18.6 percent; yet in the first quarter, Kia sales increased just under 1 percent and at the time of writing, is the only manufacturer to see a quarterly increase. The Telluride had sales go up in March as compared to last year, making it an outlier in otherwise a sea of declines.
In March, Subaru had sales decline 47.1 percent, and in the first quarter, sales fell 16.7 percent. Sales dropped across the model lineup for Subaru. "Our March sales reflect the current trends in the marketplace, with government guidelines around social distancing and stay-at-home orders limiting car buying across the board," Jeff Walters, senior vice president of sales at Subaru, said in a statement.
Mazda saw a sales decline of 41.8 percent while quarterly sales fell 4.5 percent. The Miata and CX-9 were the only models to see sales rise on a quarterly basis; all of them fell in March, some nearly 70 percent. Mitsubishi's sales fell by 52 percent in March and 15.5 percent in the first quarter. Porsche saw a sales decline of 20.2 percent in the first quarter.
Nonetheless, with the first two months of this year being largely unaffected by COVID-19, it is expected that those that report on a quarterly basis will see a smaller decline in sales versus those that report March sales.
In a Bloomberg survey, analysts estimated that, on average, sales from the first quarter of last year compared to this past quarter would drop 6.2 percent for GM, 16.1 percent for Ford, and 9.9 percent for FCA. Ford has yet to report sales figures. Sales for the year in the U.S. are expected to see steep drops. Instead of the projected 16.5 million to 17.0 million in annual sales for 2020, analysts are now forecasting anywhere between 11.2 million and 16.0 million.
It's not just stay-at-home orders keeping people from showrooms. Indicators show that buyer confidence has fallen the most since 2008. Additionally, unemployment claims for the week ending March 21 were the highest ever, at 3.3 million. For the week ending March 14, claims were 282,000.
To cushion COVID-19's blow, some automakers have offered incentives not seen since the 2008 recession. Both FCA and GM are now offering zero-interest 84-month loans for borrowers with a top-tier credit history, and Hyundai/Genesis will cover six months of payments for buyers who lose their jobs due to COVID-19.
Along with sales slowing, U.S. production has nearly come to a complete stop across the country. Many automakers had originally planned on suspending production for just a week or two, but those such as Ford and GM have extended the stoppages indefinitely, as the threat of COVID-19 spreading among factory employees remains high.
More than 3900 people have died of coronavirus in the U.S., and as of Wednesday morning, nearly 190,000 people across the country had tested positive for it, according to the New York Times.
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