DALLAS–Auto sales in the U.S plummeted in May compared with one year earlier, but there is reason for optimism, according to one analyst.
There are signs of recovery from the collapse of auto sales during the coronavirus pandemic, especially as more states begin to loosen up their stay-at-home restrictions.
Preliminary data from some of the nation’s largest manufacturers suggest retail consumers are beginning to come out and look for cars and trucks, noted Brian Turner, president and chief economist with Meridian Economics.
“However, commercial fleet buyers, namely rental car agencies, haven’t yet returned to the auto industry,” observed Turner. “Sales continue to fall an average about 20%. Dealerships have been forced to limit, or even close, showrooms as consumer stayed away due to stay-at-home or shelter-in-place orders.”
Turner said nearly 24% of U.S. states, representing 44% of 2019 sales, allowed dealerships to remain open. The other 26 states, representing 56% of sales, are allowing only online or remote sales.
“Big incentives, record 0% financing offers and all states now allowing at least online vehicle sales contributed to the better-than-expected sales,” said Turner.
The Forecast
Turner said Toyota and Honda have led the decline with sales plummeting about 54% at each of the companies last month. Hyundai reported a 39% drop, while Kia reported a 38% decline. General Motors, Ford and other major automakers recently switched from monthly to quarterly sales reports, so their monthly numbers are forecasted, he added.
“Still, the pace of retail auto sales picked up in May to an annual pace of 12.2 million vehicles, compared with 8.6 million the previous month,” Turner said. “We expect new vehicle sales to be slightly less that 1.1 million in May, down nearly 32% compared with May 2019. Though improved, the industry’s current sales pace is a long way off from last year’s average of more than 17 million vehicles.”
As CUToday.info has reported, automakers have drastically lowered their sales forecast, projecting sales of 12.6 to 14 million units during 2020.