April is expected to be a record down month for the auto industry due to the COVID-19 pandemic, according to a new report from Edmunds, an online car shopping guide in California with a Detroit office.
Experts forecast that 633,260 new cars and trucks will be sold in the U.S. The results will bring the estimated seasonally adjusted annual rate in the U.S. to 7.7 million, reflecting a 52.5 percent decrease in sales from April 2019 and a 36.6 percent decrease from March 2020.
This is the lowest-volume sales month dating back to at least 1990. The second worst month for sales in the past 30 years was January 2009, when 655,000 vehicles were sold.
“April auto sales took the biggest hit we’ve seen in decades,” says Jessica Caldwell, executive director of insights at Edmunds. “These bleak figures aren’t just because consumers are holding back on their purchases — fleet sales are seeing an even more dramatic drop as daily rental business has dried up. Like many other industries, the entire automotive sector is struggling as the coronavirus crisis continues to cripple the economy.”
Experts note that plans for easing shelter-in-place orders across the country in May could open up opportunities for automakers and dealers to capture some deferred demand, but there is still economic uncertainty ahead.
“April is likely the bottom for auto sales, so hopefully there’s only room for improvement from here,” says Caldwell. “But with employment and consumer confidence at new lows, the question remains: Will people be in the position to purchase new cars? Although automakers are doing their part by offering landmark incentives, those might not be enough if consumers cannot recover financially from this crisis.”
Edmunds estimates that the retail seasonally adjusted annual rate will come in at 6.7 million vehicles in April, with fleet transactions accounting for 13 percent of total sales.
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