Updates: Auto sales fall, Nissan, Volkswagen extend shutdowns
Jeep sold more than 15,000 Gladiator pickups in the first quarter as sales of most vehicles fell sharply with potential buyers stuck at home.
Fiat Chrysler Automobiles (FCA)

Updates: Auto sales fall, Nissan, Volkswagen extend shutdowns

With potential car buyers being told to shelter in place, the retail market shuts down.

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Cleveland, Ohio – As expected by the millions of Americans waiting for the latest news on the spread of COVID-19, automotive sales fell sharply in March. Several companies reported March and Q1 numbers on Wednesday, and the reports are as ugly as expected.

General Motors (GM), Fiat Chrysler Automobiles (FCA), Volkswagen, and Nissan only offer quarterly reports (as does Ford which announces numbers today), so stronger results from January and February hid some of the red ink. GM was down only 7.1% thanks to strong pickup sales, FCA was down 10%, and VW was off 13%.

Nissan, a company in the midst of a painful restructuring and already posting poor results before the governments began telling people to stay home, was off 30% for the quarter.

Honda, a company that still reports monthly, offers signs of what’s coming. Combined January/February sales were up 0.2%, pretty close to flat to 2019. March was down 49%, erasing early quarter gains and pulled full Q1 numbers down 17%.

“As a society, we’re all in this together. After a strong start to the year, industry sales are going to suffer in the short term, and we have suspended auto production as part of our effort to carefully manage our business in the face of the steep decline in demand,” said Steven Center, vice president of Automobile Sales at American Honda. “At Honda, we are focused more than ever on supporting our customers, our dealers, our associates, and the communities where we live and work in the presence of this unprecedented threat to our health and the economy. Our country is going to come back strong and we are going to come back strong, and we know there are better times ahead.”

Several automotive executives said sales worsened as March progressed and more states issued shelter-in-place orders, so April numbers will likely be worse than the 40% to 50% declines posted by Toyota, Honda, Hyundai, and others.

As social distancing continues, company officials say they’re looking at changing how they sell cars. Decades of automaker rules and state laws have discouraged dealers from completing vehicle sales anywhere but in a dealership. FCA, however, is expanding its Online Retail Experience (ORE) that lets customers handle all stages of vehicle purchasing online.

“Our dealers have once again stepped up as pillars of the community as they have continued to provide critical support to our customers on the road,” said FCA U.S. Head of Sales Jeff Kommor. “Many have taken extraordinary steps, ranging from enhanced sanitizing protocols for their showrooms to the offer of home delivery and other concierge services to keep consumers safe.”

Extended shutdowns

Nissan and Volkswagen, companies that hoped to restart automotive production within a week, have extended shutdowns, most likely through all of April. Shelter-in-place orders are making reopening production difficult, and the rapid decline in retail sales is lessening the need for more vehicles to be produced.

Other automakers have extended their shutdowns several times. Ford, for example, has a firm reopen date for only one plant – Rawsonville Components in Ypsilanti, Michigan, which reopens April 20, 2020, to make ventilators.

About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and Today's eMobility and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 20 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.

rschoenberger@gie.net