Global Car Sales Fell 38% in March
Impacted by stay-at-home orders, car sales in March plunged to an 11 year low. While parts of the world are starting to reopen economies, the trend in car sales is expected to get worse before it gets better.
Global new-car sales dropped 38% in March, and there are further declines to come over the next few months, says LMC Automotive.
Global sales sagged in March to the lowest since 2009 during the Great Recession. LMC says April is bound to be notably worse as countries add or extend stay-at-home orders.
Profound Impact on Car Sales
LMC notes that stay-at-home orders have already had a “profound impact” on car sales by stifling local economies and extinguishing consumer purchases of non-essential goods. “Further significant falls are expected in the coming months,” the firm cautions.
That doesn’t bode well for a speedy rebound in U.S., where the coronavirus was just getting started in March. Even so, sales plunged 38% to an 11-year low. Last year, the market totaled 17.1 million units; in March the annual sales pace was only 11.2 million.
It’s the same story in South America. Sales last month fell 27%, and LMC says the worse downturn is likely to occur this month.
What’s Happening in China?
In Western Europe, where manufacturers are equally eager to get their factories humming again, won’t get the chance to do so until early May. March sales dove 50%. With some countries extending lock-down orders through April, LMC concludes, this month’s volume in the region will be “very challenging.”
The bright spot in all this is China, where the pandemic is more or less under control. Carmakers have wasted no time beefing up their shipments to dealers, whose inventories are low. Last month, carmakers recouped more than half the 80% sales drop they felt in February.
Whether customers in China are equally eager to respond with a quick return to their normal buying habits isn’t clear. The same question bedevils other regions.
The most difficult feat ahead for carmakers won’t be gearing up their plants again. The real trick will be to sync that ability with marketplaces full of consumers who may need a little time to recover from their economic trauma and revive their appetite for big-ticket purchases.
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