The economy has been devastated by the coronavirus pandemic that continues to spread throughout the country. Businesses have been forced to close or make drastic adjustments to their usual operating practices. The automotive industry has been hit hard as manufacturing plants were forced to close to adhere to social distancing guidelines. The first quarter (Q1) sales figures from 2020 were just released, and it doesn’t look good. Automotive sales in the United States basically took a nosedive off a cliff.
How the coronavirus pandemic is affecting automotive market sales
Almost every major car manufacturer saw its sales numbers tank in the first quarter. Ford reported a 12.5 percent decline, and FCA saw their numbers drop by 10.4 percent. General Motors experienced a 7.1 percent decline, Toyota fell by 8.8 percent, and Nissan reported a dismal 29.6 percent decrease in their sales. Hyundai Q1 sales dipped by 11 percent, and in the month of March alone they experienced a 43 percent reduction.
It seems no one is safe from the toll the coronavirus outbreak has taken on the automotive market. Volkswagen saw sales go down by 13 percent, Honda and Acura experienced a 19.2 percent drop, and Subaru sales fell by 16.7 percent. Mazda also saw a decrease in sales of 4.5 percent for Q1 and Mitsubishi fell by 15.5 percent.
Mercedes-Benz is happy with its 4.3 percent, considering the current climate. Kia fared better than most, reporting less than a one percent increase for the first quarter; they were the only automaker to see a Q1 increase in 2020. With factories closed and new vehicle sales at an all-time low, industry experts are predicting that the automobile industry will continue to be hit hard through the remainder of the year.
Automobile sales for 2020 were projected to be close to 17 million in annual new vehicle sales, but in light of the current conditions, it is predicted that sales will dramatically decline. Analysts believe annual sales figures for 2020 will be closer to 13 to 14 million units.
How the shutdown of production plants will impact the rest of 2020
Automotive production lines throughout the United States remain closed because of the coronavirus pandemic that has spread across the globe. As automakers continue to assess the situation, re-opening dates are being considered. Meanwhile, Ford is focusing its attention on producing ventilators for the healthcare industry. They hope to be able to resume normal operations by the beginning of May 2020.
General Motors is making personal protective equipment with no indication as to when they will get back to business as usual. FCA hopes to reopen its North American facilities on May 4, 2020, but their European plants will remain closed for the unforeseeable future.
The shutdown of production plants will severely impact the remainder of 2020 as car prices are adjusted and the availability of new models is pushed back. Development projects will be delayed or scrapped altogether as the automotive industry tries to stay afloat in the months ahead.
The entire automotive industry has been affected
The coronavirus pandemic has had a significant impact on the entire automotive industry. With manufacturing plants closed, the global supply chain has been turned upside down. Stock prices are falling quickly, and auto parts are no longer being produced in countries like China where the virus has taken a huge toll.
Even when the lines start moving again, there may be a serious problem with the availability of parts and automotive components. Limited supplies mean production could cease before it even gets started. Car dealerships are also being hit hard by the global pandemic. Their inventory isn’t moving, and they are trying to find innovative ways to persuade consumers to purchase a vehicle in these trying times.
According to Charlie Chesbrough, a senior economist at Cox Automotive, “The second quarter will be the real measure of COVID-19’s impact on the economy and the auto industry.”