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April 22, 2020 3:30 PM, EDT

Carmakers Headed for 50% Sales Dive Can Breathe Easier

Sparks fly as robotic arms work on 2018 Honda Accord vehicles at a factory in Ohio in late 2017. Sparks fly as robotic arms work on 2018 Honda Accord vehicles at a factory in Ohio in late 2017. (Ty Wright/Bloomberg News)

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Automakers are headed for a less drastic U.S. sales collapse than feared, according to market researchers.

Retail sales to consumers are down about 50%, a drop-off that wouldn’t be as steep as China or Western European countries saw in the first full month following their coronavirus outbreaks, according to Jeff Schuster, senior vice president of forecasting with LMC Automotive, a partner of J.D. Power.

“We’re now expecting a pattern that is more of a sustained level of a 40% to 50% decline over a longer period of time, instead of the really deep hit and then a relatively quick recovery,” Schuster said by phone.

Retail sales relative to J.D. Power's pre-crisis forecasts are recovering.

The industry caught a break last week when Department of Homeland Security guidelines added vehicle sales to its list of essential services. All U.S. states now allow cars to be delivered through showrooms or online, according to J.D. Power.

Retail sales were down about 48% last week from J.D. Power’s pre-crisis forecasts, after dropping 51% the week that ended April 12 and 55% the week prior. That marks three straight weeks of improvement from the 59% plunge registered the last full week of March.

The best-performing major segment has been large pickups, while compact cars have been hardest-hit, J.D. Power said.

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