The destructive COVID-19 pandemic drove U.S. car sales deep into the ground in April, with car manufacturers indicating unprecedented 50% sales losses.
The dismal sales for April from leading industry sources reveals the frightening picture of a hard-pressed industry hammered by the demand destruction wrought by the pandemic that's keeping customers from showrooms and employees from their jobs. Analysts previously forecast sales totals to plunge to their lowest on record, and the first few manufacturers to report April sales are confirming these dire warnings. The results from Cox Automotive, Edmunds.com Inc, Autodata Ltd and J.D. Power all portray the same grim picture of massive and historic sales losses.
Edmunds and Cox Automotive anticipate a 53% industry wide plunge in sales for April. The industry was already bracing for the worst. It hoped to sell only 633,260 vehicles in April -- the lowest total in decades -- which would be a 53% plunge year-on-year, said Edmunds.
Cox Automotive estimates sales will drop to 620,000 new vehicles, which is down 53% from April year-on-year and down 37% compared to March. Analysts expect April sales to hit lows not seen in decades.
Individual car makers are reporting dismal sales numbers. Toyota and Honda were the hardest hit, with sales plummeting over 50% each in April year-on-year. Toyota saw April sales plunge to 84,694 from 183,866 last year, a 55.7% drop. The company, however, said dealers' sales of 84,696 vehicles surpassed its forecast of about 50,000 for the month.
Hyundai Motor admitted to a 39% drop in U.S. sales. On the other hand, sister company Kia Motors reported a 38.3% drop compared year-on-year. Mazda Motor said sales decelerated 44.5% for April while Subaru reported sales slid 46.6%.
J.D. Power said 24 states, which represent 44% of 2019 retail sales, allowed dealerships to remain open despite lockdown orders. The other 26 states, which represent 56% of retail sales, allow only online or remote sales.
"April auto sales took the biggest hit we've seen in decades," said Jessica Caldwell, Edmunds executive director of insights. "These bleak figures aren't just because consumers are holding back on their purchases -- fleet sales are seeing an even more dramatic drop as daily rental business has dried up. Like many other industries, the entire automotive sector is struggling as the coronavirus crisis continues to cripple the economy."
Caldwell pointed out it's currently a buyer's market. She also noted while there aren't a lot of buyers right now, those that can buy a new vehicle are taking advantage of the most generous financing programs we've seen this century.
General Motors, Ford Motor and other major automakers now report only quarterly reports, so their monthly number can only be forecast.
