Coronavirus impact on car sales might not be as bad as feared
Results from early April show things aren't as bad as forecasted, and sweet deals may keep buyers motivated.
The coronavirus pandemic drove car sales off a cliff in March and Q1, and it's going to do the same in April. But the virus' impact might not be as bad as once imagined.
CNBC reported Friday on JD Power data that shows car sales during the first part of April weren't nearly as poor as once forecasted. In full disclosure, sales fell 55% compared to forecasted levels for this month, which is horrific. However, JD Power originally expected a decrease of up to 80%, which would have been a massive contraction.
Coronavirus updates
Car sales ran into two big hurdles as the pandemic unfolded in late February and throughout March. Foremost, state-issued stay-at-home orders kept possible buyers out of new car showrooms and closed numerous sales departments across the US. Secondly, the economic impact of COVID-19 likely pushed thousands of would-be buyers away, whether they're rethinking a large purchase due to uncertainly or for other reasons.
Yet, car demand is "showing some resilience," Thomas King, chief product officer at JD Power, told the outlet. If the situation holds steady, new car sales will hover around 600,000 vehicles sold in April, down from a forecasted 1.1 million.
Why has demand stuck around? It may have something to do with the generous deals automakers started to roll out in response to lagging showroom traffic. Numerous automakers continue to advertise 0% APR financing, job loss protection that will pay six months' worth of car payments and more benefits to soften any looming uncertainty.
