Two of the largest automakers reported first-quarter U.S. sales declines as the negative economic impact of the coronavirus in March more than offset strong sales momentum at the beginning of the year.
General Motors’ sales declined 7% year over year as the OEM delivered 618,335 vehicles, according to its first-quarter 2020 figures. Halted production also contributed to a decline in inventory, down nearly 18% YoY.
GM attributed the sales decline to shelter-in-place orders now active in 39 states, according to weekly COVID-19 data provided by JD Power. Of those states, 25 have full or partial bans on automobile sales at dealerships, and five states, including Hawaii, Kentucky, Michigan, Pennsylvania and Washington, have a “no auto sales” order that even bars dealerships from online or no-contact sales.
Fiat Chrysler Automobiles posted a 10% YoY decline in vehicle sales for the first quarter, delivering 446,768 vehicles.
In order to combat declining sales as dealerships across the nation shutter their doors, FCA has launched, effective today, its “Drive Forward” program, which allows consumers to shop, purchase, finance and trade in vehicles through its new “Online Retail Experience,” the OEM announced.
Despite the overall sluggish sales volume, Ram pickup trucks increased 7% to 128,425 vehicles, shining as a “bright spot” in otherwise disappointing sales figures, according to an FCA release.
In fact, across the Detroit 3 OEMs — FCA, GM and Ford — pickup sales outperformed the rest of the market, declining only 27% compared to a 61% decline across the rest of the industry, according to JD Power. Combined, the Detroit 3 command 51% of industry retail sales.
As sales numbers decline, incentive spending from the OEMs and average transaction prices per vehicle are on the rise, especially in the pickup segment. Pickups average price comes in at $42,000, and incentive spending reached an all-time high of $7,200 in the same time period. By comparison, previous record incentive spending was $6,700 during the first week of December 2019.
The bump in sales can largely be attributed to the Detroit 3 being first to market with many of the industry’s aggressive incentive programs, such as 0% APR for 84 months and, on occasion, six months deferred payment, JD Power said.
