Coronavirus tanks GM, Fiat Chrysler's first-quarter auto sales as pandemic shutters dealerships
- GM on Wednesday reported a 7.1% decline in sales during the first three months of the year as the coronavirus causes consumers to stay at home and dealerships to shutter.
- Auto sales for all companies were expected to be healthy to begin the year, but then fell off a cliff due to COVID-19 in March.
- Most major automakers are expected to report March or first-quarter sales on Wednesday.
General Motors, Fiat Chrysler and other automakers saw their sales slide during the first quarter as consumers shelter in place at home and dealerships stay closed to try to contain the coronavirus outbreak spreading across the U.S.
GM on Wednesday reported a 7.1% decline in sales during the first three months of the year, while Fiat Chrysler, earlier in the day, said sales slid 10.4% during that time. Nissan Motor reported one of the largest quarterly drops so far, down 29.6% compared to a year ago. Porsche, Hyundai Motor, Honda Motor and other automakers also reported steep declines.
Kia Motors was an outlier for the industry, reporting a roughly 1% increase Wednesday for the first three months of the year compared to 2019.
Auto sales for all companies were expected to be healthy to begin the year, but then fell off a cliff due to COVID-19 in March. J.D. Power expects auto sales to decline at least 32% in March compared with a year ago. Edmunds forecasts sales to fall 35.5% this month, capping an 11.8% decline in the first quarter. Cox Automotive, citing the "volatility of the U.S. economy," decided not to provide a sales forecast.
As of Wednesday, 39 states had enacted "stay at home" or "essential business" mandates that affect 265 million people, or 80% of the U.S. population, according to J.D. Power. Twenty-five of these states have full or partial bans on automotive sales.
The COVID-19 outbreak hit the industry hard in March, GM said.
"In this uncertain and challenging time, GM and our strong network of dealers are here to help, offering concierge service, providing courtesy transportation to customers in need and offering home delivery where permissible," said Kurt McNeil, GM U.S. vice president of Sales Operations, in a release.
Fiat Chrysler said "strong momentum in January and February was more than offset by the negative economic impact of the coronavirus in March," which is typically the strongest sales month of the quarter.
Despite the volatility, truck sales remained in the black for some automakers.
Fiat Chrysler's hot-selling Ram truck brand was able to stay in the black with sales up 3% in the first quarter. That compares to Jeep, which was down 14%, and Dodge sliding 20%. Its Italian brands, Fiat and Alfa Romeo, experienced sales declines of 49% and 14%, respectively.
Each of GM's four brands were in the red, led by a 34.7% decline for Buick and 15.8% slide for Cadillac. Chevrolet and GMC were down 3.8% and 5.5%, respectively. The automaker's truck and SUV sales were up 6.7% in the quarter, led by a 27.3% increase in sales of its highly profitable full-size pickup trucks.
The positive truck sales did not translate to Toyota Motor, which reported a 13.7% decline in sales of its Tundra full-size pickup during the first quarter. The Japanese automaker reported its overall sales in the first quarter declined 8.8%, including a 36.9% slide in March.
Shares of Fiat Chrysler fell 5.2% Wednesday, bringing it to $6.82. The stock is down by about 54% so far this year, putting its market value at $10.7 billion. Shares of GM closed down 7.3% at $19.26. The stock, which as a market value of $27.5 billion, is down 47% so far this year.
In an attempt to spur sales, Fiat Chrysler said it will ease the purchase process through its "Drive Forward" program, which provides consumers with incentives and a new "Online Retail Experience." The program, according to the company, allows customers to complete the entire vehicle purchase process online.
Most major automakers are expected to report March or first-quarter sales on Wednesday, providing another look at how the coronavirus is crippling the auto industry. Automakers across the U.S. have ended vehicle production and other countries due to the virus. They've also cut or deferred executive and white-collar salaries and withdrawn guidances for the year.
Other automakers reporting March or first-quarter sales include:
- Hyundai Motor's sales in the first quarter fell about 11% to 130,875 units compared to a year ago, including a 42.6% slide in March due to COVID-19 pandemic.
- Honda Motor said its sales declined 19.2% in the first quarter, led by a 48% drop in March.
- Volkswagen reported a 12.6% decline in sales to 75,075 vehicles through March.
- Porsche reported its sales for the first quarter fell 20.2% to fewer than 12,000 vehicles.
- Mazda said its first-quarter sales were down 4.5% in the quarter, including a 37.2% decline in March.