U.S. Auto Sales (Predictably) Tank in April As Recovery Ramps Up

Barring some health miracle and a financial windfall distributed evenly across the country’s populace, U.S. auto sales are in for a grim 2020. IHS Markit predicts a 26.7-percent slump for the year. April, which bore the full brunt of state-level lockdown measures, saw numerous automakers, perhaps all, return their worst monthly showing in years — or decades.

Amid all this dismal sales news and OEM financial bloodletting is a ray of hope for automakers and dealerships alike. States are opening up, and with declining COVID-19 cases in several major markets — and the approval of online sales in others — volume is on the upswing.

April was always expected to be a brutal month, with Edmunds and Cox Automotive (per CNBC) both forecasting a 53-percent sales drop for a month just ended. Data from automakers that still report on a monthly basis bear this out. Hyundai saw its April volume fall 39 percent, year over year, with Kia Motors on the hook for a 38.3-percent drop.

April was a month where the number of selling days and timing of holidays had little, if any, bearing on the final tally.

Subaru of America chalked up 46.6-percent fewer sales this April than last. At Mazda, the damage amounted to a 44-percent drop. With great understatement, Honda spoke of “difficult market conditions” as it announced a 54.1-percent drop. Toyota recorded a 53.9-percent sales slump, which was actually a higher tally than predicted.

Indeed, the cratering of the U.S. new vehicle market never achieved the depths predicted upon the pandemic’s arrival. The slow return of the New York City and Detroit-area markets, coupled with the approval of online sales in Michigan and Pennsylvania moved the needle in the week upward ending April 26th, J.D. Power data shows.

After dropping 74 percent below the firm’s pre-virus forecast at the end of March, sales in San Francisco were off by only 55 percent last week. Detroit has improved from essentially zero sales in early April (down 99 percent from pre-virus forecast) to 75 percent below last week. NYC’s percentage-below figure rose from 96 percent in the week ending March 29th to 71 percent in the week ending April 26th.

Country-wide, new vehicle sales were off pre-virus forecast by 39 percent — compared to the 59-percent-below figure seen at the end of March. That’s four weeks of sales growth. Some markets, like Dallas, have almost returned to normal. J.D. Power claims that all but one of the nation’s top 25 markets (Raleigh, NC) shows sales growth last week.

Still, buyers now emerging from their meticulously clean, bread-infused homes can’t do anything about volume already lost. From March 2nd to April 26th, the U.S. new vehicle market shed 782,000 units.

[Image: Hyundai, Chris Tonn/TTAC]