If you had asked me 4 months ago if 1st quarter US auto sales would be down 495,732, nearly half a million units, in the quarter as a whole compared to the 1st quarter of 2019, I’d think you were crazy. I might even ask you to make a bet on it, and then proceed to lose whatever was on the line.
Part of the story is that Mr. Corona arrived. (Or Ms. Corona. Take your pick.) However, that was fuel on the fire of an earlier trend. Non-Tesla US auto sales were down 178,000 in 2019, no small matter. Of course, that doesn’t take away from the unprecedented collapse from the coronavirus pandemic and shutdown, but it’s something to keep in mind.
Here’s a look at the dramatic changes from Q1 2019 to Q1 2020 in chart form:
That’s a lot of red.
Nissan continued the total sales hemorrhaging it’s been experiencing since former CEO Carlos Ghosn was arrested in Japan (and jailed an absurdly long time before he escaped). In hindsight, it looks like that “solution” turned out to be a disaster for the company that may bring Nissan down entirely. We’ll see.
Ford, despite its well known reputation as pickup truck king, seemed like it was racing for #1 in the wrong direction. That aligns well with its 2019 sales collapse. Eliminating most of the cars in its lineup probably deserves a bit of a note here. When you cut several models and don’t replace them with something, it’s only logical you’d lose sales. What if this is part of a grand plan, though? What if Ford is prepping a serious powertrain turnaround, a quick shift to fully electric vehicles once production capacity is transformed? One can dream. Though, I’m inclined to think that’s nothing more than an idealistic dream. We don’t even have any indication Ford is planning to produce the Mustang Mach-E in very high volume.
Honda and Toyota routinely take the top 4 spots in the car market, with the evergreen Accord, Civic, Camry, and Corolla showing high sales year after year. The coronavirus crisis had no mercy on these models, though. Overall, as they say, the bigger they are, the bigger they fall. Toyota sales were down by about as many units as Tesla sold in total, and Honda sales were down by almost double that. This just followed a trend Toyota saw in 2019, but it reversed (and much more) the slight sales growth Honda had experienced in the USA in 2018.
The sales decreases get less dramatic on a total volume basis after those four brands, but there were still more than 200,000 lost sales from the remaining brands in the first quarter.
The percentage change alters the ranking quite a bit, though. Mitsubishi sales were down 52%, Fiat sales were down 49%, MINI and Buick were both down 35%, Nissan dropped 30%, Infiniti 26%, Acura 22%, and Dodge 20%. In other words, no matter how you cut it, the US auto industry was getting slaughtered in the first quarter of 2020.
The question is whether sales rebound as we get more clarity and hope regarding covid-19, whenever that comes. Will people go back out there and flood auto dealerships? Will rental car companies replenish their fleets in the same way as usual or cut back due to lack of travel? Will sales rebound since the economic crisis struck the professional class much less than others in society and they tend to buy new cars more?
I personally wouldn’t put much hope in a big bounce back in demand. People are nervous about their job security and their future. We are approaching (if not at) an unemployment rate we haven’t seen since the Great Depression. Most are still hesitant to go outside or rub shoulders with each other, which must hit the professional class to some degree. Plus, the Tesla Model Y just started arriving and must appeal to millions of consumers, and word of mouth regarding the Model 3 must still be getting around and leading to the model having an admirable R0.
That said, I’m not making any predictions for Q2, Q3, or Q4. 2020 has been far too unpredictable so far, so I’m not going to assume anything. Well, I take that back — I do assume 2020 US auto sales will be well below 2019 US auto sales. Also, I presume the automakers that had a really shitty 2019 will also have a shitty 2020. Furthermore, at this point, it’s hard not to imagine some serious corporate moves in the market — companies going bankrupt, brands leaving the US, and/or major mergers. I just don’t have enough information to guess more specifically what any of those would be. Do you?
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