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Automakers Tout Consumer ‘Resilience’ Despite COVID-19 Hit to US Auto Sales

Major automakers posted decrease U.S. month-to-month or quarterly new car gross sales on Wednesday due largely to weak fleet orders, however mentioned client demand remained strong regardless of the continuing coronavirus pandemic.

“This quarter demonstrated the resilience of the U.S. consumer,” mentioned Jeff Kommor, head of U.S. gross sales at Fiat Chrysler Automobiles NV (FCA) , because the automaker reported a 39% stoop in gross sales for the second quarter.

“Retail sales have been rebounding since April as the reopening of the economy, steady gas prices, and access to low interest loans spur people to buy.”

But some auto sellers fear that spiking coronavirus circumstances in states like Florida, Texas, Arizona and California might spell contemporary bother for brand spanking new car gross sales.

Scott Fink, CEO of Fink Automotive Group, which has two Hyundai shops and single Chevrolet, Volkswagen and Mazda dealerships within the Tampa, Florida space, mentioned his gross sales in June have been “pretty good,” however he was involved about “hot-bed states like where I am.”

“I’m happy to do what we’re doing, but there’s a level of anxiety from top to bottom,” Fink mentioned. “You can feel it with the consumers and you can feel it with staff members.”

U.S. auto manufacturing was shut down for 2 months within the spring as a part of efforts to thwart the unfold of the novel coronavirus. That has left automakers scrambling to ramp up manufacturing once more to increase low supplier inventories.

“GM entered the quarter with very lean inventories and our dealers did a great job meeting customer demand, especially for pickups,” Kurt McNeil, U.S. vice chairman for gross sales at General Motors Co. “Now, we are refilling the pipeline by quickly and safely returning production to pre-pandemic levels.”

GM mentioned its efforts to rebuild supplier stock ranges included working with logistics and trucking firms to be certain that autos ship as quickly as they roll off the manufacturing line.

GM posted a pandemic-fueled 34% decline in second-quarter gross sales, however famous whereas April gross sales sank about 35% versus the identical month in 2019, May and June noticed declines of round 20% or underneath.

“Our resilient sales reflect an improving demand curve,” McNeil mentioned.

April Ancira, vice chairman of Ancira Auto Group, which has 12 dealerships largely round San Antonio, Texas, mentioned within the brief time period she was extra involved about low car inventories than client demand. But long run, she worries that authorities reduction packages will run out earlier than the U.S. economic system recovers.

“At some point, this is all going to catch up to us if things don’t turn around in a hurry,” Ancira mentioned.

While U.S. client demand for brand spanking new autos has rebounded surprisingly rapidly regardless of the financial ravages wrought by COVID-19, the illness attributable to the brand new coronavirus, fleet gross sales to rental automotive firms, companies and authorities companies have dragged general gross sales down.

Recovery for these gross sales is predicted to be sluggish, whereas the way forward for the rental automotive trade is unsure.

Hyundai Motor mentioned that whereas its general gross sales fell 22% in June, gross sales to shoppers rose 6% versus June 2019, whereas its fleet gross sales plummeted 93%.

FCA’s Kommor mentioned fleet gross sales “remained low” throughout the quarter as FCA “prioritized vehicle deliveries to retail customers.”

“As a result, we have built a strong fleet order book which we will fulfill over the coming months,” he added.

Toyota Motor reported a 26.7% drop in gross sales in June, although gross sales for some SUV fashions have been up versus the identical month in 2019. Nissan Motor mentioned its second-quarter gross sales have been down almost 50%.

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