Cox Automotive Forecast: Auto sales to drop 24% in 1st half of 2020

  • The annual vehicle sales pace in the U.S. is expected to finish near 12.6 million in June, down from last year’s 17.2 million, but above May’s virus-impacted 12.2 million level.
  • June sales volume is forecast to fall 30% from June 2019 and finish near 1,070,000 units.
  • Sales in the first half are forecast to finish down 24.2% versus 2019; full-year forecast: 12.9 million, down from 17 million in 2019.

ATLANTAJune 26, 2020 /PRNewswire/ — The COVID virus and the resulting economic recession continue to negatively impact the auto industry, but June is expected to be another small step “back to normal.”

According to a forecast released today by Cox Automotive, the seasonally adjusted annual rate (SAAR) of auto sales in June will finish at 12.6 million, down significantly from last year’s 17.2 million pace, but up from May’s 12.2 million level. Sales volume in June is expected to be down by 30% compared to last year.

Cox Automotive (PRNewsfoto/Cox Automotive)

While sales volume in the first half of 2020 is forecast to drop 24.2% compared to the same period in 2019, there are signs that auto sales continue to track in a positive direction, although the pace of recovery is expected to slow in June and the weeks ahead as a number of factors may keep buyers away.

According to Cox Automotive Senior Economist Charlie Chesbrough: “The auto market will have some major obstacles over the summer that will slow the V-shaped rebound we had all hoped for.

Available inventory is likely becoming a drag on sales, and some pull-ahead demand may have occurred in previous months as a result of all the aggressive 0% financing offers, particularly those directed at pickup buyers.”

This current crisis is unique for many reasons. In previous recessions, demand falls while factories continue to operate, resulting in an over-supply of vehicles. This generally leads to large incentives from OEMs in order to drive demand from lower prices. However, during this crisis, factories shut down at the same time that consumers pulled back. As states began to reopen, buyers started coming back to the market – more quickly than many had anticipated – but factories have struggled to get back to pre-COVID levels.

Inventory levels, as a result, have been drawn down and in many markets there’s limited supply. This may mean buyers will not find the products they want in the right color or trim package. Some will buy anyway, but many will decide to wait or buy somewhere else. This supply constrain will likely hold back the recovery pace through the summer or until factories, supply chains and dealerships can all get themselves back to normal when it comes to available inventory.

Further, recent research by Cox Automotive notes that approximately one-third of purchase intenders in mid-June were indicating they’d delay their purchases, driven by general uncertainty in the market, civil unrest and continued unemployment concerns. That means fewer shoppers, fewer buyers and, as Cox Automotive Chief Economist Jonathan Smoke noted in a presentation this week, the industry is facing the potential for a “Cruel Summer” for automotive sales. The recent increase in COVID-19 cases in large states including CaliforniaFlorida and Texas is a particular concern for the industry.

June 2020 Sales Forecast Highlights

  • New light-vehicle sales are forecast to fall to 1,070,000 units, down nearly 30% compared to June 2019. Sales are expected to fall 40,000 units or nearly 4% compared to last month.
  • The SAAR in June 2020 is estimated to be 12.6 million, far below last year’s 17.2 million level, but an improvement from last month’s 12.2 million pace.

June 2020 Forecast

Sales Forecast1

June 2019

June 2020

YOY%

Q2 2019

Q2 2020

QOQ%

H1 2019

H1 2020

First-

Half%

GM

253,000*

175,000

-31.0%

744,316

488,774

-34.3%

1,409,321

1,105,206

-21.6%

Ford

218,000*

150,000

-31.4%

644,498

424,366

-34.2%

1,231,454

938,980

-23.8%

Toyota

202,352

155,000

-23.4%

608,392

404,749

-33.5%

1,152,108

900,496

-21.8%

FCA

206,000*

135,000

-34.5%

597,685

362,291

-39.4%

1,096,040

809,059

-26.2%

Honda

135,901

110,000

-19.1%

407,208

288,728

-29.1%

776,995

587,513

-24.4%

Hyundai Kia

122,507

105,000

-14.3%

359,413

276,265

-23.1%

648,111

549,040

-15.3%

Nissan

123,504

70,000

-43.3%

351,185

181,352

-48.4%

717,036

438,958

-38.8%

Subaru

61,512

50,000

-18.7%

182,772

132,608

-27.4%

339,526

263,199

-22.5%

VW

56,339

40,000

-29.0%

167,294

109,831

-34.3%

316,305

238,267

-24.7%

Mazda

22,828

20,000

-12.4%

67,722

55,873

-17.5%

138,555

123,543

-10.8%

Daimler

29,275

18,000

-38.5%

85,039

50,236

-40.9%

163,917

119,006

-27.4%

BMW

34,862

17,000

-51.2%

91,230

45,208

-50.4%

174,023

109,900

-36.8%

Tesla

25,700

10,000

-61.1%

53,975

24,350

-54.9%

83,875

80,550

-4.0%

Mitsubishi

12,317

4,000

-67.5%

29,030

10,902

-62.4%

71,100

46,465

-34.6%

Tata

8,485

5,000

-41.1%

27,155

15,272

-43.8%

62,405

44,604

-28.5%

Volvo

9,934

6,000

-39.6%

28,062

18,866

-32.8%

50,120

38,351

-23.5%

Grand Total2

1,523,786

1,070,000

-29.8%

4,444,976

2,889,671

-35.0%

8,430,891

6,393,137

-24.2%

1 June 2020 Cox Automotive Industry Insights Forecast; all historical data from OEM sales announcements

2 Total includes brands not shown

* GM and Ford monthly sales are estimated

 

Sales Forecast1

Market Share

Segment

Jun-20

Jun-19

May-20

YOY%

MOM%

Jun-20

May-20

MOM

Mid-Size SUV/Crossover

180,000

229,583

195,459

-21.6%

-7.9%

16.8%

17.6%

-0.8%

Full-Size Pickup Truck

170,000

227,748

183,148

-25.4%

-7.2%

15.9%

16.5%

-0.6%

Compact Car

85,000

142,778

87,051

-40.5%

-2.4%

7.9%

7.8%

0.1%

Mid-Size Car

75,000

123,037

74,425

-39.0%

0.8%

7.0%

6.7%

0.3%

Compact SUV/Crossover

60,000

73,482

70,084

-18.3%

-14.4%

5.6%

6.3%

-0.7%

Grand Total2

1,070,000

1,523,786

1,110,609

-29.8%

-3.7%

Cox Automotive Industry Insights data

2 Total includes segments not shown

All percentages are based on raw volume, not daily selling rate.

About Cox Automotive

Cox Automotive Inc. makes buying, selling, owning and using cars easier for everyone. The global company’s 34,000-plus team members and family of brands, including Autotrader®, Clutch Technologies, Dealer.com®, Dealertrack®Kelley Blue Book®, Manheim®, NextGear Capital®, VinSolutions®, vAuto® and Xtime®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five countries and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues of $21 billion. www.coxautoinc.com

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