Vehicle sales crash in April, analysts say, dropping by half
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It looks like vehicle sales sank to a record low in April. Figures from some of the automakers are due out later Friday, but analysts expect to see a drop of more than 50% compared to this time last year.
The sales figures could be worse than the previous low in January 2009, at the depths of the financial crisis. Analysts’ figures show that around 625,000 vehicles were sold in April.
But the over-50% drop-off isn’t as bad as China saw at the height of its COVID-19 lockdown. Eric Lyman, chief industry analyst at TrueCar, said sales dropped 80% there.
For some U.S. shoppers, the coronavirus may have actually driven a car purchase.
“We know that public transportation is something people are shying away from,” Lyman said. “We know that the vehicle is an integral part to our American life.”
Sales held up better in parts of the county with less strict stay-at-home measures. Michelle Krebs, executive analyst at Autotrader, said people with incomes in the $50,000 to $99,000 range are doing most of the buying, and pickup trucks continue to be popular purchases.
People hold on to trucks for up to a decade, Krebs said, so recent incentives have been very popular.
“Zero-percent financing for 84 months — it works really well with trucks,” Krebs said.
Analysts say April’s figures should be as low as sales go, and they could recover, even if only modestly, in May.
COVID-19 Economy FAQs
Will the federal government extend the extra COVID-19 unemployment benefits?
It’s still unclear. Congress and President Donald Trump are deciding whether to extend the extra $600 a week in unemployment benefits workers are getting because of the pandemic. Labor Secretary Eugene Scalia believes the program should not be extended, and White House economic adviser Larry Kudlow said the additional money is disincentivizing some workers from returning to their jobs. Democrats want to keep providing the money until January.
As states lift restrictions, are people going back to stores and restaurants?
States have relaxed their restrictions, and many of us have relaxed, too. Some people have started to make exceptions for visiting restaurants, if only for outdoor dining. Some are only going to places they trust are being extra cautious. But no one we’ve talked to has really gone back to normal. People just aren’t quite there yet.
Will surges in COVID-19 cases mean a return to lockdowns?
In many areas where businesses are reopening, cases of COVID-19 are trending upwards, causing some to ask if the lockdowns were lifted too soon, and if residents and businesses might have to go through it all again. So, how likely is another lockdown, of some sort? The answer depends on who you ask. Many local officials are now bullish about keeping businesses open to salvage their economies. Health experts, though, are concerned.
You can find answers to more questions here.
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