US Q1 auto sales slump as coronavirus cuts March buying: consultants

Market disruptions caused by the coronavirus pandemic weighed on US new automotive sales in March, subsequently causing first-quarter sales to plummet over 30% year on year, according to industry consultants.

Analysts with Cox Automotive said Wednesday March new vehicle sales dropped 38% to a seasonally-adjusted annual rate of 11.4 million units from 17.3 million units in March 2019. Sales in the month were also down from an SAAR of 16.7 million units in February.

"Cox Automotive estimates of retail sales showed that the declines increased as March progressed," the analysts said in a report. "April opened with new vehicle sales down 67% year over year."

Cox Senior Economist Charlie Chesbrough said ongoing dealership closures and reluctant consumer activity would likely cause the downturn to extend well into the second quarter.

"April is likely to see further historic declines, driven largely by a lack of consumer confidence and substantial increases in unemployment," Chesbrough said in a recent commentary. "That trend will likely continue into early summer, at best. The second quarter will be the real measure of COVID-19's impact on the economy and the auto industry."

Edmunds provided similar perspective regarding declining new vehicle sales in March. In a recent report, analysts with the agency said they forecast a significant drop in March vehicle sales to 1.04 million units (SAAR 11.9 million), down 35.5% year on year and down 23.4% from the previous month.

"The first two months of the year started off at a healthy sales pace, but the market took a dramatic turn in mid-March as more cities and states began to implement stay-at-home policies due to the coronavirus crisis, and consumers understandably shifted their focus to other things," Jessica Caldwell, Edmunds' executive director of insights, said.

Due to depressed sales in March, Edmunds said it expected an 11.8% year on year drop in Q1 sales to 3.55 million vehicles.

General Motors led all North American automakers in expected Q1 sales (637,104 units) and March sales (186,428 units), according to Edmunds data.

"History has shown us that this industry can survive through almost any financial or natural disaster, and we're confident that they're going to come out of this tough period on the other side," Caldwell said.