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Auto Sales Slowly Improving: Can Carmakers Bounce Back?
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Vehicle sales in the United States have started to recover after witnessing a massive decline in March due to the COVID-19 outbreak. Retail sales somewhat stabilized during the first two weeks of April. According to J.D. Power, retail sales for the week ending Apr 19 improved 3% from the week ending Apr 12.
Carmakers have been suffering for a while with plants closed and sales taking a beating due to the coronavirus pandemic. However, with lucrative discounts, low financing rates and states starting to ease restrictions, sales saw a rebound in April. Also, on Apr 22, the United Auto Workers (UAW) said that discussions were on with Detroit’s Big Three automakers to safely restart production.
Auto Sales Slowly Recovering
On Apr 22, J.D. Power said that for the week ending Apr 19, retail sales were down 48% from the pre-virus forecast, reflecting an improvement of 3 percentage points from the week ending Apr 12. Around 300,000 new vehicles were sold in the first 19 days of April.
The recovery is also expected to extend to the used vehicle market, which is expected to bounce back in the second half of the year when demand escalates. The firm said that sales are still down but the decline is far less than previously expected.
However, with stay-at-home orders still in place the rebound in sales has been mainly because of online bookings and purchases. With automakers giving big discounts and states allowing online vehicle sales, the auto market is gradually reviving.
Light duty pickup trucks proved to be the most resilient, with sales declining only 16% in the week ending Apr 19. J.D. Power cites May sales as critical for the auto industry as many state governments are likely to ease restrictions.
All major carmakers including Ford Motor Company (F - Free Report) , General Motors Company (GM - Free Report) and Fiat Chrysler Automobiles N.V. are offering 0% financing rates and deferring payment options for new car purchases, which are aiding this recovery in sales.
Auto sales nosedived in March with all major carmakers reporting a decline. Earlier this month, Ford said that its sales fell 12.5% through March from a year ago. Also, General Motors said that its U.S. sales declined 7% in the first quarter from a year ago, with “significant declines” in March due to the outbreak of the COVID-19 virus. Fiat’s U.S. sales declined 10% in the first quarter from a year ago.
Tesla, Inc. (TSLA - Free Report) , however, was one of the exceptions. The electric carmaker kept giving deliveries in the United States despite shutting down production at its Fremont, CA factory.
Carmakers Contemplating Reopening of Plants
The UAW on Apr 22 said that is in talks with carmakers to safely restart production that has come to a standstill due to the coronavirus outbreak. General Motors, Fiat and Ford shuttered their plants in March as the virus continued to spread rapidly. Ford carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, a few carmakers are planning to restart production at a few of their assembly plants in the United States by early May. General Motors has developed “screening, cleaning and social strategies” in line with the inputs and guidance from the Centers for Disease Control and Prevention and the UAW at all its U.S. facilities.
Kia Motors and Daimler AG’s Mercedes-Benz plan to restart production at their U.S. plants on Apr 27. Tesla and Honda Motor Co., Ltd (HMC - Free Report) plan to resume U.S. operations in May. Ford, Fiat and General Motors are yet to announce a restart date.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Auto Sales Slowly Improving: Can Carmakers Bounce Back?
Vehicle sales in the United States have started to recover after witnessing a massive decline in March due to the COVID-19 outbreak. Retail sales somewhat stabilized during the first two weeks of April. According to J.D. Power, retail sales for the week ending Apr 19 improved 3% from the week ending Apr 12.
Carmakers have been suffering for a while with plants closed and sales taking a beating due to the coronavirus pandemic. However, with lucrative discounts, low financing rates and states starting to ease restrictions, sales saw a rebound in April. Also, on Apr 22, the United Auto Workers (UAW) said that discussions were on with Detroit’s Big Three automakers to safely restart production.
Auto Sales Slowly Recovering
On Apr 22, J.D. Power said that for the week ending Apr 19, retail sales were down 48% from the pre-virus forecast, reflecting an improvement of 3 percentage points from the week ending Apr 12. Around 300,000 new vehicles were sold in the first 19 days of April.
The recovery is also expected to extend to the used vehicle market, which is expected to bounce back in the second half of the year when demand escalates. The firm said that sales are still down but the decline is far less than previously expected.
However, with stay-at-home orders still in place the rebound in sales has been mainly because of online bookings and purchases. With automakers giving big discounts and states allowing online vehicle sales, the auto market is gradually reviving.
Light duty pickup trucks proved to be the most resilient, with sales declining only 16% in the week ending Apr 19. J.D. Power cites May sales as critical for the auto industry as many state governments are likely to ease restrictions.
All major carmakers including Ford Motor Company (F - Free Report) , General Motors Company (GM - Free Report) and Fiat Chrysler Automobiles N.V. are offering 0% financing rates and deferring payment options for new car purchases, which are aiding this recovery in sales.
Auto sales nosedived in March with all major carmakers reporting a decline. Earlier this month, Ford said that its sales fell 12.5% through March from a year ago. Also, General Motors said that its U.S. sales declined 7% in the first quarter from a year ago, with “significant declines” in March due to the outbreak of the COVID-19 virus. Fiat’s U.S. sales declined 10% in the first quarter from a year ago.
Tesla, Inc. (TSLA - Free Report) , however, was one of the exceptions. The electric carmaker kept giving deliveries in the United States despite shutting down production at its Fremont, CA factory.
Carmakers Contemplating Reopening of Plants
The UAW on Apr 22 said that is in talks with carmakers to safely restart production that has come to a standstill due to the coronavirus outbreak. General Motors, Fiat and Ford shuttered their plants in March as the virus continued to spread rapidly. Ford carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, a few carmakers are planning to restart production at a few of their assembly plants in the United States by early May. General Motors has developed “screening, cleaning and social strategies” in line with the inputs and guidance from the Centers for Disease Control and Prevention and the UAW at all its U.S. facilities.
Kia Motors and Daimler AG’s Mercedes-Benz plan to restart production at their U.S. plants on Apr 27. Tesla and Honda Motor Co., Ltd (HMC - Free Report) plan to resume U.S. operations in May. Ford, Fiat and General Motors are yet to announce a restart date.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
8 breakthrough stocks now>>