US car sales declined significantly in March, the recent blow to the nation’s economy from the coronavirus pandemic.
Fiat Chrysler (FCA) stated Wednesday that its first-quarter sales in the United States dropped by 10% even though sales were up during the first two months of the quarter.
“Strong momentum in January and February was more than offset by the negative economic impact of the coronavirus in March,” FCA said.
General Motors (GM) reported a 7% decline in sales for the quarter, which it attributed to the significant drop in March sales because of the virus.
Neither company would publish the month-by-month sales figures. But Toyota reported results for both March and the quarter. Its daily sales pace declined 32% in March, while its total sales in the month dropped 37%, hurt in addition by one fewer sales day in the month. Overall, its first-quarter sales dropped 9%, similar to the drops reported at Ford Motor and GM. So it’s possible that Ford and GM suffered a similar drop in March to what Toyota reported.
Many other automakers are yet to report sales of March or first-quarter sales. But it seems rather obvious that none of them are likely to report good sales, said Michelle Krebs, an analyst for Cox Automotive.
“What did save them is that March started out pretty well, but then it dropped off a cliff,” said Krebs.
Numerous factors are working against auto sales. One of the leading factor is that more than three-quarters of Americans live in states or cities where they are being asked to stay at home except for essentials such as shopping for food, drugs or seeking medical care, in order to stop the spread of coronavirus.
Furthermore, many potential consumers are suffering economic setbacks because of the businesses they work for or own being shut down. More than 3 million people recently filed for gaining the unemployment benefits, a record for one week. And that has frozen a lot of potential consumers out of the credit market because of their job or economic situation, Krebs added.
“The three things that most determine car sales are credit, employment and consumer confidence,” Krebs stated. “All are working against car sales. April is going to be even worse.”
Fiat Chrysler answered with the most aggressive sales incentives yet on the market. The offer, presented on Wednesday, allows eligible consumers to get a seven-year interest-free loan with payments deferred for 90 days. But consumers still need to qualify for the loan.
The company stated it is now offering a new online purchase option that permits buyers to buy a vehicle off a dealer lot, conduct a vehicle trade-in process, apply for credit, receive price and payment estimates and evaluate service protection plan options.
Most dealerships are still not closed, according to Fiat-Chrysler, but there are some states where dealerships have been ordered to shut down, Krebs said. About 37% people surveyed by Cox Automotive stated they will wait going to a dealership, even for servicing on their car, due to the coronavirus crisis.
About 215,344 people in the US have been confirmed as being infected with the coronavirus. The virus has killed 5,112 people in the country.
