For the most part, car sales have been plummeting thanks to the coronavirus pandemic. It makes sense given that with so many businesses shutting down and record-high unemployment figures that fewer people would have money to spend on a new or used car. Except for certain special cases, such as Tesla, most car companies have struggled big time so far this year. Most car companies reported their third-quarter sales figures on Thursday, showing that, on average, car sales have fallen by around 10% this quarter.
While sales for regular sedans have remained weak, consumer demand for trucks and sports-utility vehicles is surprisingly strong. This helped mitigate what otherwise could have been a much worse quarter for the auto industry.
First on the list was General Motors, which said that its Q3 sales in the U.S. fell by exactly 10% in comparison to a year ago. While still bad, that’s a considerable improvement from the 34% decline seen back in Q2, where, among other things, the company’s factories were completely shut down for a time. Pickup trucks have also seen a surge in demand as well, helping boost General Motors’ performance.
Low car loan rates are helping boost demand a little bit more than they would otherwise be. However, only so much can be done to mitigate the pandemic’s effect on the overall economy. Economists made similar comments on Thursday, saying that this quarter has seen better-than-expected results from the industry.
“Super low auto loan interest rates have boosted retail auto sales, yet more strength comes from pandemic-induced demand,” said Elaine Buckberg, Chief Economist at General Motors. “The auto market enjoyed a strong and profitable third quarter, but with the economy losing momentum as fiscal support wanes, we can’t expect the sales pace to continue,” added Jonathan Smoke, another Chief Economist over at Cox Automotive.
Fiat Chrysler reported a Q2 sales dip of 10.2%, far from the worst auto company this quarter, but far from the best either. It’s also a major improvement from the 39% decline seen last quarter.
Honda’s sales were down 9.5%, while Toyota, now the second-largest carmaker in the world after Tesla took its spot earlier this year, saw car sales fall by around 11%. The well-known German brand, Volkswagen/Audi, saw its own sales fall by 10.8% during this past quarter as well.
The worst performing automaker was Nissan, which saw its Q3 sales plummet by a massive 32.4%. As for companies that have done well, Hyundai saw its sales rise by a surprising 1.4% this quarter. Besides that, the only other car company that’s been doing quite well for itself has been Tesla, whose shares have skyrocketed over the past year. As of right now, most people are expecting Tesla sales for its third quarter to be close to reaching a record high.
Ford’s Q3 results will be coming out on Friday, while Tesla’s are expected sometime early next week. Most car companies that published their Q3 results today saw their shares dip by a couple of percentage points. However, it remains uncertain whether Q4 will be a better or worse quarter for automakers.
