By Steph Willems on March 25, 2020
Everything seemed hunky dory after the New Year’s celebrations covered up and all the party hats and disposable beverage cups were swept from the floor.
The impact of COVID-19 on U.S. vehicle sales is far from set in stone, however the best-guess photo is becoming clearer. Clearer, and even worse for the market.
Previously this month, Morgan Stanley expert Adam Jonas foresaw a 9-percent drop in U.S. sales, equating into 15.5 million deals. In 2015 saw 17.1 million new cars roll off lots. LMC Automotive was more conservative, anticipating a more modest 3-percent dropÂ to roughly 16.5 million units. Worldwide, the company said, new vehicles sales would fall 4 percent.
Elsewhere, RBC Capital markets forecasted the big sales increase seen in 2015 at Tesla would invert itself, with general sales falling â $ ” in spite of the intro of the Design Y crossover. Ford will publish a full-year loss, it included, with General Motors burning through $3.5 billion â $” which’s after consuming a couple billion during last fall’s UAW strike.
Liquidity levels are strong within the industry, something that will assist OEMs weather the storm. Some automakers, most significantly Ford and GM, have actually tapped line of credit to strengthen their financial position.
As the pandemic grows in the West, forecasts that were already pared back from start-of-the-year crystal ball sessions are getting further hairstyles. Wednesday early morning brought the current:
LMC is coming out w/ our revised projection & we will be at 14.2 mn systems in the United States for 2020, w/ more risk of 1-1.5 mn systems. At this phase, we do not see going as low as2009 Global outlook will be out later today with the significant cut in the outlook going beyond 12 mn units.
— Jeff Schuster (@jwschust) March 25, 2020
At the height of the recession, U.S. automobile sales dropped, falling to 10.4 million for calendar year 2009.
Even ifÂ the U.S. economy is resumed for business come Easter, that doesn’t indicate long lineups outside the dealer. Lessees at the end of their term will require new wheels, sure, however task and health uncertainty, coupled with an extremely infectious viral break out that will not disappear the minute shop lights come on, will definitely affect costs habits.
[Image:Â Joerg Huettenhoelscher/Shutterstock]