How many people were buying cars as COVID-19 restrictions took over?
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Was anyone buying cars and trucks in the month that just ended? March sales figures are due today. Fiat Chrysler’s first-quarter sales fell 10.4%, Hyundai posted a 43% decline in U.S. sales in March alone and Porsche reports a Q1 sales drop of 20.2% year-over-year. Other major automakers are expected to follow this trend.
Meanwhile Ford says it won’t reopen its plants on April 14 as planned, with no new date set.
With large sections of the country under stay-at-home orders, and people feeling concerned about their jobs, it’s not surprising to see auto sales numbers drop, says Kristin Dziczek, vice president of industry, labor and economics at the Center For Automotive Research.
“The automobile is one of the single most expensive consumer purchases people make,” she said. “When you can’t leave your house, it’s very difficult to do that.”
It’s not just the drop in demand. Automakers have also been forced to close their factories.
“Automakers do not make money unless they are making cars,” Dziczek said.
When the factories are reopened, it could take until the third or fourth quarter of 2020 for sales to fully recover, says Michael Dunne, CEO of ZoZo Go, an Asian car market consultancy.
In China, he saw sales fall 80% in February, and 50% in March. That’s not exactly a fast recovery yet.
“The key obstacle at this point is not production, but rather consumer appetite for that new car,” Dunne said.
Some shoppers may be poised to make purchases they already had planned, he says, but how car buyers feel when they can get back out to dealers really depends on how long this situation lasts.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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