Trade Groups Concerned Over Potential June 1 Start of USMCA
Automotive News reports that trade groups representing automakers and parts manufacturers are "gravely concerned" by reports that the Trump administration is considering an entry-into-force date of June 1 for all sections of the USMCA, including automotive rules of origin, as the industry struggles to mitigate ongoing disruption caused by the novel coronavirus. The groups, which include the American International Automobile Dealers Association said in a statement issued Friday after the ratification that the three countries "have yet to issue, even in draft form, the uniform automotive rules-of-origin regulations," requiring that 75 percent of auto content be made in North America. The groups said it would require additional time to interpret and implement the auto provisions under USMCA, especially as the industry focuses on managing production during a global pandemic. "Rushing forward with these new rules without the industry understanding what the rules of the game are or having the rules in place is shortsighted," Cody Lusk, CEO of AIADA, told Automotive News. "It would have a negative impact on our business and the industry and American consumers." Read more here.
Dow Plunges Nearly 3,000 Points as Fed Intervention Does Little to Subdue Wall Street's Distress
Fears that policymakers have not done enough to avert a protracted economic downturn deepened a sense of national crisis Monday and sent stocks to their worst single-day losses since the Black Monday crash of 1987, reports The Washington Post. The sell-off accelerated, with the Dow Jones industrial average plunging nearly 3,000 points, after President Trump warned that disruption from the coronavirus pandemic could last through August and issued new public health guidance, saying Americans should limit gatherings to no more than 10 people. The Supreme Court said it will postpone scheduled oral arguments through April, citing its stance during the 1918 Spanish flu epidemic and outbreaks of yellow fever in 1793 and 1798. The Dow Jones industrial average closed down nearly 13 percent in late trading before closing at 20,188, down more than 2,997 for the day. That marked the largest one-day point decline in U.S. history, though in percentage terms Monday’s 13 percent loss was topped by the nearly 23 percent decline on Oct. 19, 1987. All three of the Dow’s 2,000-point daily losses have occurred in the past week. Read more here.
Dealership Closures Begin; States, Cities Could Force More
Two dealerships in California have closed their doors for two weeks out of precaution amid the spread of the novel coronavirus, and stores in other states may be forced to follow suit as municipalities and governors across the U.S. take broader action, reports Automotive News. Capistrano Toyota, in San Juan Capistrano, says on its website and in a recorded phone message that it has closed because of the COVID-19 pandemic, which over the past week in the U.S. and abroad has caused unprecedented event cancellations, school closures and business disruptions. Claremont Toyota also has the same message on its website. Several municipalities and states have begun to order shutdowns of restaurants, bars, casinos and other nonessential businesses as a way to try to control the spread of the virus. Mark Schienberg, president of the Greater New York Automobile Dealers Association, said new-vehicle dealerships do not appear to be part of New York states closings. New Jersey dealerships remained for open business on Monday afternoon, although NJ CAR had recommended to its dealers that they consider themselves non-essential retail, and thus would be affected by the curfew, until it receives further clarification by the state. Read more here.
RBC Warns Coronavirus Could Cause 20% Decline in U.S. Vehicle Sales as Auto Stocks Tank
The coronavirus and its ripple effect on consumer demand could send global auto production down 16% in 2020, fueled partially by an expected 20% decline in U.S. sales, according to RBC Capital Markets. CNBC reports that the new forecasts come as automaker stocks decline more than other industries amid the COVID-19 outbreak. Shares of publicly-traded U.S. automakers are down between about 30% and 40% this month, including double-digit losses Monday. Tesla remains the only U.S. automaker with its shares in the black for this year. RBC said its new forecast for global automotive production being down 16% is largely “from a demand perspective,” including retail sales in China – the world’s largest auto market – being cut in half so far this year. The new forecast calls for U.S. auto sales to fall to 13.5 million vehicles, 20% below last year’s sales. At the beginning of the year, many were calling for U.S. auto sales to be about 16.5 million to 17 million. Read more here.
U.S. Car Buyers May Get a Break on Loans as Coronavirus Threatens Auto Sales
Several automakers on Monday said U.S. buyers of new vehicles will have the option to defer their payments and customers with existing car loans could ask for payment rescheduling if impacted by shutdowns due to the spread of coronavirus, reports Reuters. The move is also aimed at boosting new car sales during a time of uncertainty for dealerships, as an unprecedented wave of closures and restrictions is prompting millions of U.S. workers and students to stay home to slow the spread of the outbreak. Ford Motor Co on Monday said its credit unit is offering customers purchasing new vehicles the option to delay their first payment by 90 days. A U.S. spokesman for Nissan Motor Co Ltd said the automaker will launch a similar program. Hyundai Motor Co on Friday said it would defer payments for select new cars by 90 days and provide up to six months of payment relief for customers who lose their job. Ford, Nissan, General Motors Co, and Toyota Motor Corp also said they will provide payment relief options to customers affected by the virus, including extensions and deferred lease payments. Read more here.
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