The National Automobile Dealers Association slashed its forecast for U.S. new-vehicle sales this year as the coronavirus pandemic spreads across the U.S.
NADA now estimates sales will come in between 13 million and 13.5 million. Its previous forecast was for 16.8 million.
The U.S. auto market, which has generated more than 17 million deliveries in each of the past five years, hasn't chalked up fewer than 13 million sales since 2011.
U.S. new-vehicle sales last month plunged nearly 38 percent compared with March 2019, according to NADA's first-quarter sales analysis.
The report shed further light on the drop in sales last month, as most companies no longer publicly report monthly numbers. Figures for the first quarter remain incomplete, with a final tally from Jaguar Land Rover expected Wednesday following Mercedes-Benz's report of a 4.8 percent decline for the three months.
March's seasonally adjusted annualized rate of sales fell to 11.35 million, Motor Intelligence estimated, the lowest level since April 2010.
In a closer snapshot of how the pandemic is quickly upending the industry, volume last month dropped 37 percent at Toyota Motor North America, 48 percent at American Honda and 42 percent at Hyundai Motor America. Among the other automakers reporting monthly figures last week, March deliveries skidded 19 percent at Kia, 47 percent at Subaru, 42 percent at Mazda and 52 percent at Mitsubishi. Sales at each of those automakers were up through February.
"New-vehicle sales were on a healthy trajectory until mid-March, when we saw widespread social distancing measures due to the coronavirus go into effect and dramatically slow sales," said Patrick Manzi, NADA chief economist. "However, most dealerships remained open for essential services through much of March, which helped blunt the decline in new-vehicle sales somewhat."
The NADA report, citing J.D. Power statistics, also showed automakers increased incentives in March by 32 percent from a year earlier to $4,800 per vehicle. For pickups, incentives grew 84 percent to $7,200. J.D. Power said these were all-time records.
The incentives come at a time when dealers in many states are either banned from vehicle sales or are limited to online deliveries. About 39 U.S. states currently have stay-at-home orders in place.
In the report Manzi said: "We expect there to be pent-up demand once Americans begin returning to work."
New-vehicle retail sales are expected to fall by 80 percent in April and between 40 and 70 percent in May, according to J.D. Power.
The NADA report also said consumer confidence dropped by 11.9 points in March to 89.1 in the University of Michigan Index of Consumer Sentiment, a key bellwether. The U.S. economy, in effect, has been reduced by about 30 percent during the pandemic, according to most reports.
"We foresee that consumer confidence will remain compromised as the pandemic continues to negatively impact the U.S. economy and American jobs," NADA spokeswoman Juliet Guerra told Automotive News on Tuesday.
David Phillips contributed to this report.