Automotive industry analysts are predicting the coronavirus pandemic will lead to a 40 percent dip in U.S. auto sales in March.
The poor sales outlook was peddled by the National Automobile Dealers Association (NADA) in a statement it released Wednesday. The statement, which was written in cooperation with the Alliance for Automotive Innovation and the Motor & Equipment Manufacturers Association (MEMA), called on politicians in Washington to pass “an economic stimulus package to address the impact of the escalating COVID-19 health crisis,” on the automotive industry.
“Stalling sales and halted production threatens a vast network of businesses in every state, which is why Congress and the Administration must take important steps to pass a robust economic stimulus package that can assist businesses large and small as they work to confront the challenges that they face due to events beyond their control,” the statement said.
The organizations are looking to Washington to create credit facilities for automotive businesses impacted by the economic fallout. They also want the government to implement tax deductibility on paid leave at companies with more than 500 employees, delayed or deferred quarterly tax payments and expanded expensing for machinery and equipment. NADA is also looking to delay the rollout of the Canada Agreement (USMCA), which President Donald Trump was hoping to implement this year in the lead up to the 2020 election.
NADA says enacting these policies “would help moderate the impact of the economic situation our nation faces which will assist businesses and workers as we work to get various parts of our economy moving again in the coming weeks and months.”
The auto industry is facing major hurdles in the wake of the pandemic. In addition to falling sales, automakers have also been forced to shut down their Canadian, American and Mexican manufacturing plants. When the plants eventually do get back up and running, parts shortages and other roadblocks could make it difficult for the facilities to return to full capacity, which may lead to inventory/supply issues at dealers.
GM has commented on the NADA letter, though it is well aware of the coming challenges posed by the pandemic. In a press release sent out this week, the automaker announced it had suspended its financial guidance for the 2020 calendar and fiscal years due to the uncertainty brought on by the global crisis. In February, the last time GM provided a financial outlook, GM CFO Dhivya Suryadevara stated the company expected “another strong year in 2020.”