The U.S. Canada border remains closed.
According to Wards Auto and J.D. Power, U.S. retail sales through May 24 are down -25% vs. pre-virus forecast at 670.000 units, with J.D. Power predicting 991.000 retail sales in May, down -24% from its pre-virus forecast. This is a significant drop but a much better situation than the estimated -53% from April, however some industry observers are disappointed the market didn’t fare better given the number of stay-at-home order being lifted throughout the month.
Tyson Jominy, J.D. Power’s vice president of data and analytics, believes the reasons why the market is still very weak are multiple, among them weak leases, with only 22% of buyers during the week ending May 24 having leased a vehicle, down nearly 10 percentage points from pre-virus levels. Also, mature buyers are staying home with sales to buyers aged 66 to 75 years down -30% for the week ending May 24 and -37% for buyers over 75. Subprime buyers are being hit by the economic crisis and only account for 7% of retail sales vs. 10% pre-virus. Inventory is also dangerously slimming down notably for pickup trucks. There is a migration towards used vehicle purchase with used sales down just -13% this month vs. -25% for new.