Auto sales plummeted in March as stay-at-home orders kept consumers from dealer showrooms.
March sales were down significantly following a strong showing in January and February. Toyota Motor NA reported U.S sales tumbled 36.9 percent for the month and 8.8 percent for the quarter. Fiat Chrysler and General Motors noted considerable declines in March and said sales for the quarter fell 10 percent and 7 percent, respectively. Honda sales plunged 48 percent during March and Nissan reported a 30 percent decline for the quarter.
“Consumers obviously and understandably shifted their priorities,” said David Kershaw, Nissan’s U.S. sales chief in a comment to The Wall Street Journal. “The situation is very fluid right now and everybody’s trying to get their arms around where and how this is going to play out.”
Auto analysts expect the seasonally adjusted annualized selling rate to drop markedly in March. Edmunds predicts a sales rate of 11.9 million, LMC Automotive 9 to 10 million, and J.P Morgan 6 to 7 million.
“As the pandemic rolls across America, consumers’ interest in big ticket purchases like vehicles has all be disappeared,” said Charlie Chesbrough, a senior economist at Cox Automotive. “The second quarter will be the real measure of COVID-19’s impact on the economy and the auto industry.”
U.S. automakers have suspended production due to low demand and to protect workers from infection during the coronavirus outbreak. Most have extended production suspensions through mid-April and continue to evaluate conditions as the COVID-19 situation evolves.
“As a society, we’re all in this together. After a strong start to the year, industry sales are going to suffer in the short term, and we have suspended auto production as part of our effort to carefully manage our business in the face of the steep decline in demand,” said Steven Center, vice president of Automobile Sales at American Honda. “Our country is going to come back strong and we are going to come back strong, and we know there are better times ahead.”
Honda has taken a number of actions to help communities during the COVID-19 pandemic. The company has pledged $1 million to provide food to vulnerable communities in the U.S, Canada and Mexico as well as matching donations of up to $1,000 by employees to food banks. Honda operations are also donating personal protection equipment, including N-95 masks, to hospitals and repurposing 3-D printers at North American operations to manufacture visors for protective face shields.
“We just don’t know when and how this ends, and that’s the biggest problem right now,” said Jeff Schuster, senior vice president of forecasting for research at LMC Automotive. “All of this uncertainty creates a lot of angst and that has been spreading really like a wildfire through the industry,” he told the Detroit News.
Schuster said the industry is hoping for a fourth-quarter bounce-back as the virus disperses. But the possibility exists that COVID-19 will make another appearance as the flu season starts in the fall, potentially without a vaccine ready to prevent outbreaks.
“Do we get any lift in the fourth quarter? That’s really what’s in question,” LMC’s Schuster said. “There is the potential that we have waves of infection, where you essentially shut things down for a short period to try to manage outbreaks. If we’re dealing with that next year, obviously we don’t get the rebound.”
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