- Consumer confidence sliding as COVID-19 cases grow.
- New and used vehicle sales plummet.
- Vehicle inventory is stacking up.
Consumer confidence continues to decline and will not likely bottom until COVID-19 cases and deaths start to diminish.
COVID-19 cases keep growing in the U.S., but the pace of increase has started to slow even while the rate of testing has increased. Testing had its largest daily increase on Friday, April 3. Stay-at-home orders have increased to cover most of the U.S., and that is key to slowing the pandemic.
Jobless claims: The related closures will lead to a substantial economic contraction in March and the second quarter. The damage to the economy is most clearly seen in jobless claims, which have totaled nearly 10 million in the last two full weeks of March.
The employment report in April will set a record for job losses and could see the unemployment rate rise to levels not seen since the Great Depression. The rest of the year could see some recovery, but it will depend on how the pandemic plays out.
Vehicle sales plummet: March already saw a 38% decline year-over-year in total vehicle sales. The March SAAR came in at 11.4 million vehicles, a decrease from last year’s 17.3 million and down from this February’s 16.7 million rate.
Broken down by channel, retail sales in March were down 41%, leading to a retail SAAR of 8.7 million from 13.8 million last March and 13.3 million from this February. It was the lowest monthly retail SAAR since February 2010. Fleet purchases – rental, commercial and government combined – were down nearly 28%. Commercial was off 18%; rental down 34%.
Cox Automotive estimates of retail sales showed that the declines increased as March progressed. April opened with new vehicle sales down 67% year over year. Used sales are running 66% lower than a year ago.
Inventory levels: Due to the low sales rate, new vehicle inventories ended March at more than 3.7 million units. The days’ supply for March was 94, up 26 days year-over-year and up 26 days from February. Average car days’ supply came in at 81, up 23 days year-over-year and up 22 days from February. Light truck days’ supply was 99 last month, up 26 days from last year and up 28 days from the prior month.
Check back tomorrow for a video that will include updated data. Join Cox Automotive Chief Economist Jonathan Smoke and Zo Rahim, manager of economics and industry insights for Cox Automotive, to hear insights on the major economic and industry trends that shaped both the new- and used-vehicle markets in the first quarter. See the call details.