Automakers Feel The Burn As Q2 Profit and Loss Numbers Paint a Very Sad Picture
COVID-19 pademic prompts dramatic drop in car sales for Q2by Ciprian Florea, on
The ongoing COVID-19 pandemic left a big mark on the automotive industry. Most factories were shutdown for more than a month starting March 2020, but new car sales also dropped due to unemployment generated by temporary layoffs and fears of an upcoming financial crisis.
Sales in the first quarter of 2020 went down due to March being a slow month, but numbers for the second quarter are in and deliveries have gone under rather dramatically. Every big automotive group has reported sales drops of at least 26 percent in the U.S., but some brands have gone under by more than 50 percent.
GM and FCA are down by more than 30 percent
Sales of Fiat Chrysler Automobiles have gone down by 39 percent in the second quarter of 2020. Dodge has been hit the hardest, with a sales drop of 63 percent compared to the same period in 2019. Chrysler sales are down 58 percent, while Fiat sales decreased by 54 percent. Ram Trucks also took a 35-percent dive, while Jeep and Alfa Romeo have gone under by 27 and 21 percent, respectively.
General Motors also took an overall hit of 34 percent. While not as bad as FCA’s brands, GM’s companies also reported losses higher than 30 percent. Cadillac leads in the group with 41.4 percent, followed by Buick with 35.9 percent. Chevrolet sales are down by 33.6 percent, while GMC reported a decrease of 32.9 percent.
Toyota, Volkswagen, and Nissan reported similar drops
The Volkswagen brand announced that U.S. sales have gone down 29 percent in the United States. Toyota’s overall figures account for a 34.6% drop, but Nissan had it worse with a 49.5-percent decrease. Hyundai did a bit better than the rest with a sales decrease of only 22 percent. Mitsubishi sales went down by a whopping 58 percent, but that’s hardly surprising considering the company’s presence in the U.S. Ford has yet to release sales figures for the second quarter of the year.
Premium and luxury brands aren’t doing any better
Sales have dropped in the premium market too. Infiniti sales are down 44 percent, while Lexus deliveries are down 26.8 percent. The same goes for BMW (39.3 percent), Porsche (20 percent), Audi (35 percent), Mini (41.5 percent), and Maserati (55.9 percent). In the luxury department, Rolls-Royce reported a sales deficit of 38.4 percent compared to the 2019.
Is the market going to recover?
Although these numbers are bleak, it does seem that the market is on a rebound. Although still low compared to 2019, June 2020 sales are higher than those in March and April, so the market may be slowly recovering.
There are concerns that many countries are reporting an increase in COVID-19 infections, but things are expected to get much worse in the absence of a second lockdown.
“We’ve returned to business with April to June sales stronger than we could have expected, with the pace of recovery accelerating in the second half of the quarter,” Dave Gardner, executive vice president of Auto Sales at American Honda Motor, said in a statement.
Honda’s sales for the quarter are down 28 percent, but deliveries in June are down only 16 percent, which accounts for a notable recovery. Still, it might take many months until sales are back to 2019 figures.
Overall U.S. vehicle sales for 2020 is estimated to reach around 13 million, a significant drop from the initial 17-million estimate.
Source: Auto News