The new 2020 GMC Acadia AT4 edition puts the emphasis on off-roadability.
A good start to vehicle sales in January and February ended abruptly in mid-March as carmakers reported sales dropped precipitously as state and local officials shut businesses and put social distancing measures in place in response to the coronavirus pandemic.
Carmakers, across the board, reported sales declines for the quarter and especially in March as steps to counter the virus were put into place. General Motors, Fiat Chrysler and Nissan reported a drop in sales with the decline accelerated in the second half of March. Several automakers will report sales Thursday.
“We must bear in mind that the coronavirus pandemic did not truly affect vehicle sales until the middle of March,” said Eric Lyman, chief industry analyst for ALG, a subsidiary of TrueCar.
(New vehicle interest rates rise in March.)
GM reported a sales decrease of about 7% compared to a year ago in the first quarter of 2020. The industry experienced significant declines in March due to the spread of the virus.
While many FCA products saw sales slump, the Chrysler Pacifica bucked the trend in the first quarter.
“In this uncertain and challenging time, GM and our strong network of dealers are here to help, offering concierge service, providing courtesy transportation to customers in need and offering home delivery where permissible,” said Kurt McNeil, U.S. vice president, Sales Operations.
Fiat Chrysler Automobile reported a 10% drop in sales compared to the same three-month period a year ago. The Ram brand rose 3% and pickup trucks were up 7%, and some individual models ticked up — Chrysler Pacifica minivans (5%) and Dodge Durango were up 5%, FCA said.
Nissan, which was struggling before the pandemic emerged, said its sales dropped 29.6% during the first quarter of 2020 as Nissan Division sales fell 30% and Infiniti Division sales slid 25.6%. Subaru, which reports sales monthly, offered a glimpse of the size of the sales drop, reporting that sales dropped 47% during March. The company’s sales slid 16.7% in the first quarter.
Volkswagen reported a sales decline of 42% in March after sales had increased 9.4% during January and February. Toyota also reported a steep decline for March, dropping 36.9%, while the company’s quarterly sales report showed only an 8.8% decline even though March is typically one of the best months for new vehicle sales.
(Pressure on automakers rises as shutdown gets extended.)
The 2020 Subaru Outback took a big hit in March.
“While the automotive industry and broader U.S. economy were brought to a near halt in March, average transaction prices remained stable from February and increased from this time last year, showing strength in line with the first two months of the year,” said Tim Fleming, analyst for Kelley Blue Book.
With most of the country encouraged to stay at home for at least another month and unemployment skyrocketing as a result, the impact of this year’s auto sales will be severe. However, production is also at a standstill, as North American factories have been shut down for weeks. This coincidental drop in demand and lack of new supply is extraordinary. For March, new-vehicle prices remain solid, but there are still many unknowns about April and what the state of the economy will be for the remainder of the year.
“While the automotive industry and broader U.S. economy were brought to a near halt in March, average transaction prices remained stable from February and increased from this time last year, showing strength in line with the first two months of the year,” said Tim Fleming, analyst for Kelley Blue Book.
“Prices were supported by the abundance of incentives quickly enacted by manufacturers and their captive finance companies, including 0% financing for 84 months and payment deferrals of up to 180 days.”
Volkswagen’s Tiguan sales dropped 17% in the first quarter of 2020 after a strong start.
While automakers have moved to offer very friendly financing and other incentives in place to bolster sales, demand is simply falling and April sales are going to be worse than March.
“Historically, there’s been a strong correlation between consumer confidence and average transaction price,” Lyman said. “We’re now seeing one of the largest one-month declines in consumer confidence in nearly 50 years. April will provide a much clearer picture of the full impact caused from the coronavirus.”
(Car dealers struggling to cope with coronavirus turn to online, “touches” car sales.)
By way of comparison, the Dow capped its worst-ever first quarter on Tuesday with a 400-point loss. The blue chips erased 24% of their value in the three-month period, and 17.9% in March alone.