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- As COVID-19 has forced people to stay home, analysts are projecting lost auto production and sales to result.
- Across the U.S. and the globe, the threat of COVID-19 spreading among factory employees has forced companies to suspend production.
- Many analysts have revised their new-vehicle sales estimates in the U.S. for 2020, originally forecasting sales of 16.5 million to 17 million, and now projecting sales of between 13 and 14 million.
The novel coronavirus has brought the U.S. economy to a standstill and analysts are now getting a grasp on how the virus is going to impact the automotive industry. Production has come to a halt for most plants in the U.S. and sales projections are being revised to reflect the economic turmoil which has engulfed the industry.
Over the course of last week, Ford, Fiat Chrysler, General Motors, Mercedes-Benz, Subaru, Toyota, Volkswagen and others all announced that they would be suspending production at their plants in the U.S., and for some, in North America. Many of the announcements followed other, less extreme changes to prevent the spread of COVID-19 among factory workers.
The story has been the same in Europe. Automotive plants across the entire continent have paused production to mitigate the spread of the virus. Factories in South America have seen similar measures taken.
All of the suspensions in production, taken together, will amount to reducing global production by more than 1.4 million vehicles, according to IHS Markit. In North America, the research firm estimates that the shutdowns will reduce production by 478,000 units, and in the U.S., by 336,000 units.
Analysts have also been revising their projections for new-vehicle sales in the U.S. for 2020. At the beginning of the year, many were projecting that the year’s sales would total between 16.5 and 17.0 million. Now, RBC Capital is estimating that 2020 U.S. sales will ring in at around 13.5 million, down 20 percent from last year. J.D. Power is forecasting this year’s sales to be between 14 and 16 million.
According to Cox Automotive, in the week ending March 14, new-vehicle sales dropped 24 percent from the week prior and were down 29 percent from a year prior. Used-vehicle sales saw a drop of 29 percent from the week prior.
TrueCar subsidiary ALG issued three estimates for the year. Its middle estimate was for 13.2 million new-vehicles sales this year. If the economic impact of COVID-19 is lessened, 15.3 million is what ALG projects; 11.2 million sales for the year is the lowest of the three estimates.
“With the temporary closure of dealerships across the nation, continued declines in the stock market, and ongoing uncertainty around the short/mid-term strategy to battle COVID-19, ALG expects further declines in our annual automotive sales forecast,” Eric Lyman, chief industry analyst for ALG, said in a press release. “While events continue to unfold daily, it seems the most likely outcome is vehicle sales landing in the mid-13-million range for 2020.”