Practically every industry has been hit in some way by the COVID-19 pandemic. The auto sector in particular has had it rough, with both production and sales taking a massive downturn.
However, it appears that there may be signs of them beginning to recover. Current market research shows that new vehicle sales are expected to be around 1.1 million for May. This is a 32-33% decrease in sales when compared to May 2019. When compared to the sales numbers of April 2020, though, this is representative of a roughly 50% increase.
Edmunds’ executive director of insights Jessica Caldwell stated that “We can safely say that April was the bottom for auto sales during the coronavirus pandemic.” While there’s still “a long road to recovery ahead”, the sales for May are “a really encouraging sign for the industry.”
May has historically been an important month for auto sales. Usually, automakers will use the month to kick off their summer sales season, in an effort to clear out current model-year vehicles and make room for new ones. Edmunds has ranked May as the third best month for sales on average in the past five years.
Part of the reason behind the uptick in sales has been the relaxing of stay-at-home orders all throughout the country. At the same time, many dealerships are offering discounts and special offers to generate sales. Some are even beginning to feel confident enough that they have begun to dial their offers back from the more-generous ones seen at the start of the pandemic.
Furthermore, many auto manufacturers have begun to restart their production efforts. J.D.Power expects that it will take until at least July for vehicle inventories to begin normalizing again. They also expect that between 1.2-1.6 million sales in total will be lost up through July due to the pandemic. While many of these are expected to be recovered in the future, some won’t be due to financial changes or because of the increase in telecommuting.