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
What’s the latest on the extra COVID-19 unemployment benefits?
As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.
With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?
The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.
Which businesses got Paycheck Protection Program loans?
The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.
Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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