A new report from the automotive industry experts over at J.D. Power indicates auto sales in the United States will fall by up to 3 million units this year due to the coronavirus pandemic.
The J.D. Power report indicates retail vehicle sales will total 14 million to 16 million units this year, a dip of up to 3 million vehicles year-over-year. The company’s “pre virus outlook” for 2020 was 16.8 million – an estimate that was already down from the 17 million-plus vehicles that were sold in the U.S. in all of 2019.
There was also a pang of positivity in the J.D. Power report, though. While the auto sales forecast for 2020 is currently looking very grim, the company believes auto companies are in better shape than the airline industry, for example, which may be slower to recover.
“Unlike airline seats and food, vehicles are durable goods and have historically demonstrated an ability to recoup sales lost due to short-term disruptions. As such, the auto industry has the potential to recover from virus-related sales disruption,” the report said.
J.D. Power’s estimates for the U.S. auto industry were formed using sales data from China, as that is where the coronavirus outbreak began and the country is thus further along in the pandemic timeline.
According to The Detroit Free Press, roughly 1.8 million vehicle leases are to expire between March and July of this year in the U.S. – something the newspaper described as a potential “bright spot” for the industry in this trying time. Depending on the future economic situation brought about by the ongoing pandemic, though, many Americans may wait for things to stabilize before entering a new lease agreement or financing a new vehicle.
GM, along with Ford and FCA, was also forced to shutter its U.S. manufacturing facilities this week due to the pandemic. It’s not clear how long the plant shutdowns may last, but this could create further headaches down the road as dealer inventories shrink.
Earlier this week, GM announced it would be offering 0 percent interest for up to seven years for qualified customers to help drive sales amid the global crisis. It is also offering 84-month loan periods on certain vehicles and allowing customers to defer payments for up to 120 days if they are in the top credit tier.
Source: The Detroit Free Press