How many people were buying cars as COVID-19 restrictions took over?
Share Now on:
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.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.