Auto Sales Plummet in First Quarter as Buyers Stay Away

Automakers reported a plunge in new-vehicle sales as fear of the coronavirus and stay-at-home orders kept consumers from dealerships, adding to the troubles of the country’s largest manufacturing sector.

General Motors said sales fell 7 percent in the first quarter and Fiat Chrysler said first-quarter sales fell 10 percent. Both companies said a significant decline in March offset strong sales in January and February.

In addition, Hyundai reported a 42 percent drop in U.S. sales in March, and Mercedes-Benz had a 50 percent decline. Other automakers will report monthly and quarterly totals later on Wednesday.

ALG, a company that tracks trends in auto sales, estimated that industrywide March sales fell 37 percent from a year ago. Analysts will tabulate a total for March sales after all automakers have reported their numbers.

Dealers had hoped to continue selling cars at the beginning of March, but customer traffic quickly dwindled as it became clear that the virus was spreading rapidly. Many dealerships around the country remain open for repair and maintenance services, often with reduced hours.

“The market right now is really shellshocked,” said Brian Benstock, general manager of Paragon Honda in Queens. He said his service department is in “limp mode” and his sales area is dark.

Tom Maletic, a retired pharmaceuticals salesman in Napoleon, Mich., was ready to turn in a 2011 Ford Focus in need of major repairs a week ago, but the virus forced him to put off a purchase. Instead he spent $1,500 on fixing his Focus, which has 130,000 miles on the odometer.

“My wife said we could get a Mustang, but I wasn’t going to go out shopping for a car,” Mr. Maletic said.

The drop in sales is the second big blow to automakers. Most companies have shut down factories across North America to prevent the spread of the virus among workers.

Automakers and dealers expect a bigger decline this month because stay-at-home orders will be in effect for most or all of the month in many parts of the country. Even as some states lift or relax those orders, consumers will likely stay away from showrooms for some time.

In St. Louis, where a lockdown order has been issued by the local government, Ann Kittlaus is unsure of how to trade in her family’s 2017 Acura MDX, since the lease is expiring soon. “We would have to have the dealer deliver a new one and take the other away,” said Ms. Kittlaus, a public relations professional and mother of two college-age children.

She added she would probably let the vehicle sit for a week to be sure it doesn’t have any traces of the virus. In any case, she said she is not in a hurry to make the trade. “It’s not like we’re going anywhere,” Ms. Kittlaus said.

A dramatic drop in sales in April could cause a painful chain reaction. With no buyers driving cars off their lots, dealers won’t have to order more from the manufacturers. That could force car companies and their suppliers to keep their plants idle or production low even once officials allow more people to go back to work.

Signs of strain have already surfaced. G.M., Ford Motor and Fiat Chrysler have cut or deferred pay for executives. G.M. and Ford have drawn on lines of credit to stock up on cash. Group 1 Automotive, a Houston-based company that owns 242 new-vehicle dealerships and 49 repair shops, has cut executive pay and furloughed thousands of employees for at least 30 days.