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
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
Give me a snapshot of the labor market in the U.S.
U.S. job openings in February increased more than expected, according to the Labor Department. Also, the economy added over 900,000 jobs in March. For all of the good jobs news recently, there are still nearly 10 million people who are out of work, and more than 4 million of them have been unemployed for six months or longer. “So we still have a very long way to go until we get a full recovery,” said Elise Gould with the Economic Policy Institute. She said the industries that have the furthest to go are the ones you’d expect: “leisure and hospitality, accommodations, food services, restaurants” and the public sector, especially in education.
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
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