Journalist Comments About March 2020 Auto Sales
Auto Central April 1, 2020;Cox Auto Senior Economist Charlie Chesbrough, commenting on March auto sales notes, “Sales volume appears to be near our internal forecasts—well down, as most industry watchers had feared. Current tracking suggests an overall market in March 2020 in the 10 million to 12 million SAAR range. As the pandemic rolls across America, consumers’ interest in big ticket purchases like vehicles has all be disappeared. And for those folks still interested in purchasing, in many markets they can’t because of mandated dealership closings. April is likely to see further historic declines, driven largely by a lack of consumer confidence and substantial increases in unemployment. And that trend will likely continue into early summer, at best. The second quarter will be the real measure of COVID-19’s impact on the economy and the auto industry.”
Michelle Krebs, executive analyst at Autotrader:
As the market contracts in the near term, we expect some automakers will use the crisis to clean their houses, choosing to eliminate models and even brands. Long-suffering brands like Fiat might not survive the crisis. We also anticipate that sales of subcompact and compact cars, as well as subcompact SUVs, will struggle the most in the coming year. These segments tend to be bought by the least credit-worthy buyers, who already pay high interest rates and are the most vulnerable to layoffs in this economic crisis. At the other end of the spectrum, high-end luxury and performance vehicles also are vulnerable as they are discretionary purchases that do best when the stock market is high and bonuses are paid at big corporations.
Karl Brauer, executive publisher of Autotrader and Kelley Blue Book:
As expected, the sales numbers for March and Q1 are down, with nearly all of the drop-off occurring in the last half of March. While the impact is dramatic, with no definitive end in sight, it’s not unprecedented. Industry veterans have seen steep downward trend lines before, and they’re always followed by upward lines once circumstances change. Automobiles are an integral part of the U.S. and global way of life. The need for new automobiles isn’t changing, even if the near-term sales rate is going through a dramatic shift.
Brad Korner, general manager of Cox Automotive Rates & Incentives:
With the market and economy impacted by COVID-19, OEM’s are changing incentive offers and cadences. Traditionally, new incentive programs are released the first few days of the month and are held in place for the most part through the month-end. However, with COVID-19 ravaging the economy, roughly two-thirds of brands reacted with new offers midway through March in an effort to slow rapidly falling sales. March offers appear to be holding in place for early April for two key reasons: 1. OEM’s are evaluating consumer activity to offers like 0% interest, waiving first 3 payments and deferred payment starts; 2. They are evaluating consumer demand for offers that may include home delivery, electronic contracting and virtual delivery tools. It is likely we will see weekly OEM incentive offers remain fluid as a reflection of shopper activity and feedback.