The fallout from the global coronavirus pandemic will lead to a nine percent dip in U.S. auto sales, according to automotive industry analysts at Morgan Stanley.
In a memo released this week, Morgan Stanley analyst Adam Jonas said concerns about the virus and its effect on the economy could lead some to delay large purchases such as a new vehicle. The investment bank says this could cause auto sales to fall to 15.5 million units this year, down from 17.1 million in 2019. Investors had already predicted US auto sales would take a hit in 2020 compared to last year, even before the coronavirus outbreak.
“We are reducing our 2020 SAAR estimate to 15.5 million from 16.5 million due to the coronavirus demand shock,” Jonas said in the investor note released Wednesday. “Lower consumer sentiment will mean consumers may put off the purchase of expensive consumer discretionary purchases such as a new car.”
As a result of the current situation, Jonas reduced his full-year earnings estimate for GM from $5.80 per share to $4.26 per share. The full scope of the impact coronavirus has had on GM’s sales, and U.S. auto sales in general, will become more clear when first-quarter sales are published in April.
The pandemic has also had affected the auto show circuit, which automakers use to display and promote their latest products. The Geneva International Motor Show was forced to cancel on short notice earlier this month, while the New York Auto Show was pushed back from April to August. The North American International Auto Show is currently still on for its June date, with NAIAS Executive Director Rod Alberts saying they are “continuing to move forward with all of our partners to produce a great event.”
As of this writing, a total of 129,775 people have been infected with the coronavirus, while another 4,751 have died and 68,672 have recovered.
Source: Automotive News