U.S. auto sales drop amid coronavirus pandemic

Yahoo Finance’s Emily McCormick joins Seana Smith to discuss U.S. auto sales as the coronavirus rattles the car industry.

Video Transcript

SEANA SMITH: So you've got auto sales out this morning. And the numbers were not too encouraging. So going through some of those figures, they were the weakest in quite some time.

We have Q1, Fiat Chrysler sales off just around 10%. Porsche sales, those were off almost 20%, or just over 20%, 20.2%. GM's Q1 deliveries off just around 7%.

Emily McCormick is joining us now with more on this. And Emily, when you take a look at these numbers and the impact coronavirus is having on the auto industry, it doesn't seem like there's any sign of this letting up anytime soon.

EMILY MCCORMICK: Absolutely, Seana. And it does seem like things could potentially be getting worse in April, especially as more states in the US implement shelter in place orders and social distancing. That's going to continue keeping consumers out of those showrooms and preventing further auto sales.

So looking at these numbers, you're absolutely right. Fiat Chrysler US auto sales were down 10.4%. That was worse than the decline of 9.9% expected for the first quarter. For General Motors, we had those sales down 7%.

Also steeper than the drop of just 6.2% that had been anticipated. Now both of these automakers did indicate that they had strong sales for January and February. And it really just in March, and particularly the end of March, that they started to see these steep declines.

Now, neither Fiat Chrysler nor General Motors do break out their sales by month. But if we turn actually outside of the US, if we look at Hyundai, they did break out their March sales, specifically. And they said that those were down 43% in the month versus an overall first quarter decline of 11%. So that really starts to illustrate the magnitude of the drop just at the end of the first quarter alone.

SEANA SMITH: Now--

EMILY MCCORMICK: Yeah.

SEANA SMITH: Well, I was going to say, it's interesting here because we saw such a significant drop in the first quarter. And what a lot of these automakers are doing is that they're rolling out new promotions to try and attract buyers. But I think there's a lot of skepticism out there in the street just in terms of whether or not that will make a significant difference here, at least in the short term.

EMILY MCCORMICK: Exactly. So if we look at some of these offers, we have Fiat Chrysler and General Motors, they're both offering some seven year 0% financing deals, as well as boosting online sales options for customers so they don't actually have to go into these physical dealerships. And while that could potentially help a little bit, at the same time, if consumers don't have anywhere to go, if they don't have a need for a new vehicle right now as they are confined to their homes, it just isn't something that's going to help the demand picture for automakers.

And something else I found interesting looking at General Motors' report was the fact that they reported that their inventory was down 18%. So that is also showing-- reflecting the early impact of the fact that they are shutting down production in North America amid the COVID-19 outbreak.

They're going through that inventory, but at the same time, if there's no demand, it's not necessarily clear whether that's going to have, you know, overall impact. But they are working through quickly that inventory and that has been dropping.

SEANA SMITH: All right, Emily McCormick, thanks so much.