AutoBeta(AutoBeta.net)04/04 Report--

Due to the impact of COVID-19 's epidemic on the global car market, relevant industries in the United States recently released figures on car sales in March, which have dropped to the lowest level in a decade. Although sales in China are gradually picking up thanks to the effective control of the epidemic, the market still falls short of expectations.

According to data, US car sales fell to 11.4 million in March, down from 16.8 million in February and down about 35 per cent from 17.5 million in the same period last year. Such data sent the US auto market back to where it was a decade ago, the biggest year-on-year decline since the 2008 financial crisis.

Although the US car market did not show a decline of more than 50 per cent in March as in China, because of the rapid spread of novel coronavirus's epidemic, US car sales will fall by 80 per cent or more in March, according to market analyst J.DPower. However, judging from the current situation, the United States only fell by about 30% in March, which may be better than the Chinese market.

In fact, this has something to do with the government control of US stocks. In early March, the confirmed case of the COVID-19 epidemic in the United States was still at a low level, and the government did not make any relevant control, while the life of local residents remained unchanged, and the overall market economy remained normal. However, with the rising number of confirmed cases in the United States, the government found that the situation was serious and made corresponding regulatory measures, so that most sales and auto industries began to shut down and the overall market began to decline.

According to preliminary data, none of the eight major car brands forecast by the US auto market fell in March. However, according to the forecast of foreign experts, it is not only these car companies that have experienced a decline, but also other brands, including Ford, Jaguar Land Rover, Mercedes-Benz in the United States, Volvo and other manufacturers that have not yet announced March sales.

Some analysts pointed out that as the US auto industry declines, Japanese automakers will be hit hard, as Japanese cars that rely too much on the US market are affected by the epidemic, and the region with the worst decline in sales is bound to be in North America. Honda's u.s. sales fell 48% in march, making it the worst-performing of japan's big three carmakers.

At present, state governments have issued recommendations for home quarantine, so as potential consumers delay or cancel car purchases, unemployment soars and worries about the stock market and economic prospects will follow in the coming months. The US auto industry will be hit hard, and it will be even worse from April. In addition, Morgan Stanley analyst Adam Jonas revealed in a research report on March 27th: "at present, there are few cars sold in the United States."

Although, since February this year, China has resumed work and production within the scope of effective control of the epidemic, even Hubei, the worst part of the epidemic, has successively realized single-shift production plans since the end of March to help dealers complete part of the supply of cars. However, the market performance still did not achieve the expected rebound.

According to the latest restocking performance of dealers in the first three weeks, only 12600, 15700 and 24000 wholesale vehicles were realized, down 68 per cent, 67 per cent and 53 per cent respectively from a year earlier. Even if the sales data released by Honda, a more representative Japanese brand, totaled only 60,000 vehicles, an increase of more than five times month-on-month, it still fell by 50.8 from a year earlier. Among them, Guangzhou Auto Honda fell 50% to 32200 vehicles in March from a year earlier, while Dongfeng Honda dropped 51% to 28200 vehicles.

It can be seen that the retail recovery in March has not exceeded expectations, and the corresponding retail inventory in the current period is still high. According to the Federation, judging from the current progress of the recovery of the auto market, the phenomenon of explosive growth in demand is still not prominent, and the weekly sales performance is still in a stable state compared with the same period last year.

With the decline of China and the United States, the two largest car markets in the world, it will have a huge impact on the global car market in 2020. As a result, a number of agencies have revised down global sales figures, including McKinsey, a global management consulting firm, which expects global car sales to fall by 29% in 2020 and 15% in China, which cannot be recovered in the short term. Moody's, the credit rating agency, expects global car sales to fall 14 per cent in 2020, while auto market research firm HIS Markit forecasts that global car shipments will fall by more than 12 per cent year-on-year in 2020 and the Chinese car market by 10 per cent.

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