Global Sales Impact of COVID-19 Is Staggering

The question haunting every industry exec’s mind is: how long does it last? Few can hazard a guess, what with the coronavirus pandemic spreading through global markets at an uneven speed, with uneven impacts (in part brought on by uneven government responses).

Last week, analysts at J.D. Power issued best- and worst-case forecasts for the coming months and year in the U.S. market. This week, we got a snapshot of how the pandemic has upset markets overseas.

You just read about the return to something approaching normalcy in the Chinese new car market, brought on by the recent easing of quarantine measures across the nation — especially in the pandemic’s epicenter of Wuhan. Stats from J.D. Power’s weekly webinar show that progression, but they also show the distance left to go before consumers in that country return the kind of sales dealers are used to.

At the height of China’s epidemic (the first week of February), dealerships recorded a 96-percent drop in sales versus normal volume. As of April 3rd, 99 percent of the country’s dealerships had reopened, but dealer traffic amounted to only 66 percent of normal levels.

In the first half of March, new vehicle sales in China had recovered by half, down only 47 percent, year over year.

While the pandemic’s arrival in Europe came a month after it first spread through China’s manufacturing heartland, the impact on new vehicle sales, depending on country, was almost as severe. Sales fell 85 percent, year over year, in Italy last month. Spain, nearly as hard hit as its Mediterranean neighbor, saw monthly sales fall 69 percent in March. France’s tally was 72 percent below 2019 figures.

The virus spread north from Europe’s Italian epicenter, prompting stay-at-home orders and business closures at a later date than in the south. Still, UK sales dropped 44 percent in March. In Germany, which has fared relatively well thus far, new vehicle volume saw a 38-percent year-over-year drop last month.

Auto plants in that region are, like those in North America, offline.

On this side of the Atlantic, March’s U.S. sales tally showed a 41-percent decline for the month. However, that number masks the quick progression towards zero seen in the latter half of the month. The week ending March 29th saw U.S. retail sales down 79 percent, year over year. One week later, on April 5th, sales were off 84 percent from last year.

Some large markets, like hardest-hit New York City and the Detroit metro area, are almost completely devoid of sales. As of today, only 24 states, comprising 44 percent of 2019’s sales volume, are allowing dealerships to open their doors to the public. The rest is a mishmash of online or remote sales, or no sales at all.

“The weak exit rate from March combined with late arriving stay-home orders in many states means the industry still has yet to reach the bottom,” J.D. Power stated, noting that, thus far in April, the top 25 markets in the U.S. are showing declines of at least 50 percent.

[Image: Audi]