Car Sales Fall Like a Rock

Dealerships are closed and customers are staying home. Yes, car dealers can still sell vehicles online, but it’s tough to persuade a prospective buyer with that new car smell over the internet. And it’s just not as impressive to see the latest gadgets on the small computer screen.

Eric Lyman, chief industry analyst at car-shopping website TrueCar.com, said:

“When you look at March, we basically lost half the month.”

His firm expects March auto sales to drop 37 percent, with April sales off between 50 and 60 percent. If the guidelines regarding business closures and sheltering in place remain in effect, those could be optimistic projections.

A rebound for the sector will likely depend on how long the crisis lasts and what level of support the U.S. government provides for consumers in the meantime.

The major car companies will report quarterly sales on April 1 and April 2. Those numbers probably won’t shed much light on the issue since most of the sales happened before the U.S. took dramatic action to stem the spread of the coronavirus.

Tesla will also report, and analysts expect the car company delivered 93,000 vehicles in the first quarter.

Cox Automotive estimates new vehicle sales to consumers under “stay-at-home” orders fell as much as 80 percent to 90 percent.

IHS Markit estimates the coronavirus pandemic will cut full-year 2020 sales by 15.3 percent and globally sales will fall 12 percent – “considerably worse” than the fall in sales during the Great Recession in 2008-2009.

 

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