Auto sales in the first quarter are an early indication of bad times ahead. We’re getting a good look at how the coronavirus is devastating the auto industry.
Sales for the first quarter:
GM down 7%
FCA down 10%
VW down 42%
Nissan down 29%
Ford will announce numbers tomorrow.
The Detroit Big 3 automakers are running on fumes. Most plants are shut down. We’ve been showing you how GM and Ford are making ventilators and face masks but they’re not making any money and the worst is yet to come.
“Some of those numbers are off a cliff," says John Mc Elroy Autoline Auto Analyst. "And if we look at what happened in China we’re probably going to see sales down 90% percent in April.”
Most dealers across the nation are closed for sales as some 70 percent of Americans are in a stay home state. Michigan shut down online sales until the middle of this month. But Fiat Chrysler launched new sales incentives today.
“The whole auto industry knew it was going into a disaster,” continued Mc Elroy.
The companies will look to make cuts including what could be temporary furloughs of salaried employees like a week off without pay or other measures.
The 2008-09 recession forced GM and Chrysler to seek government bailouts.
“The first 2 Trillion dollars of economic stimulus will help," McElroy said. "But that’s only going to get us to June or so. I’m sure we’re going to see multiple stimulus programs coming out of Congress. We're probably going to have to see them try to bail out a number of different industries including the automotive industry."
President Trump and the White House Task Force experts say people should stay home during April. It could be extended through May as the models show the number of coronavirus cases won’t level off until then. Many are asking where is the bottom?