Anticipated Sales Numbers in Context
A new record may be set in light vehicle sales. But not a good one.
“April is likely to be the sales bottom for the vehicle market during this crisis. Recent sales data suggests demand is starting to recover modestly after the initial shock in March and early April. Year-over-year daily declines, while still high, are consistently showing improvement over recent weeks. Some people want to buy a vehicle or need to buy a vehicle, even in a pandemic.”
That’s Charlie Chesbrough, senior economist at Cox Automotive, looking at where April 2020 sales are likely to come in.
And that bottom is L-O-W.
Cox Automotive anticipates the April SAAR (seasonally adjusted annual rate) will be 7.5 million.
To put that into context: The April 2019 SAAR was 16.5 million units.
Cox predicts that light vehicle sales for April will be about 620,000 units.
To put that into context: The lowest sales month since 1976 was January 2009, when total sales were 655,000 units. And the SAAR calculated for that month was 9.6 million.
Place & Type
Cox Automotive finds that there isn’t uniformity in what’s happening sales-wise due to the fact that some places in the country were hit sooner with COVID-19 and lockdown measures were taken at different times.
So, for example, luxury and Japanese brands, which are strong in the Northeast and West, are likely to be down significantly because of the virus effects, while full-size pickups will do “relatively well” because they are popular in the Southern and Plains states, where the lockdown was not as extensive.
(To put that into context: Compared with April 2019, Cox expects fullsize pickup truck sales to be down in April 2020 by 39.6%—that’s what “relatively well” means now.)
One incentive for purchase right now, and which will probably help sales to rise in May: 0% financing. Cox found that some 20% of new vehicle sales are financed at 0%.
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