Auto Market Weekly Summary

The peak in daily new COVID-19 cases was two weeks ago. The growth in new cases is declining but is still an inconsistent trend. Progress is slow as individual markets each have their own unique pandemic curves. Testing is ramping up but remains inadequate.

Historic joblessness: The damage to the economy can be seen in the historic 20.5 million jobs lost in April. About 33.4 million Americans have applied for unemployment compensation over the last seven weeks through May 1.

The unemployment rate rose to a record 14.7%. The underemployment rate, which more fully captures the amount of jobs lost including temporary losses, such as furloughs, jumped to 22.8%. Both rates were records in the monthly data going back to 1948.

Job losses were largest in leisure and hospitality, education, healthcare, retail and business services. Auto dealers shed 265,000 jobs. About 9.7% of the job losses are classified as permanent.

Consumer sentiment: Consumer sentiment declined for four of the last five days, but auto sales and our leading indicators show that May has continued to build upon improvement that began in April.

New-vehicle sales: A more detailed analysis of April new-vehicle sales show they were down 47% year over year, with one more selling day compared to April 2019. The April SAAR came in at 8.6 million, a decrease from last year’s 16.5 million and down from March’s 11.4 million rate. This is the lowest monthly SAAR going back to 1976.

Combined rental, commercial, and government fleet purchases were down 70% year over year in April. Retail sales of new vehicles were down 41% from a year ago, leading to a retail SAAR of 7.7 million, down from 13.5 million last April and down from March’s 8.7 million rate. Fleet sales are down 24.9% in 2020 through April. Retail sales are down 20.3%, as the overall new vehicle market is down 21.2% so far this year. [Read more details.]

Vehicle inventories: New-vehicle inventories came in under 3.3 million units. Days’ supply for April was 121, up 45 days year over year and up 27 days from March. Average car days’ supply came in at 121, up 57 days year over year and up 40 days from March. Light truck days’ supply was 121 last month, up 40 days from last year and up 22 days from the prior month. Inventory for GM and Toyota trucks declined, and some brands showed relatively lower stocks. [Read more details.]

Average incentive spending came in at $4,296 per vehicle, up 26% year-over-year and up 7% from March.

Used-vehicle sales: Our initial estimates show that used-vehicle sales declined by 34% year over year in April. We estimate the April used SAAR was 27.0 million, down from 39.3 last April and 32.0 in March. CPO sales decreased 45.6% year over year and were down 19.9% from March.

Manheim index: The Manheim Used Vehicle Value Index declined 11.4% month-over-month in April. This brought the Index to 125.8, which was a 9.2% decrease from a year ago and the lowest level in three years. [Read more details.]

On a year-over-year basis, all major market segments saw declines, but luxury cars and SUVs declined less than the overall market. Weekly Manheim Market Report (MMR) price indices saw decelerating declines in the last two weeks of April. MMR Retention, which is the average difference in price relative to current MMR, was as low as 89.5% in early April but ended the month at 100%.