Car sales in Europe imploded in April, down an extraordinary 76.3%. The drop was unprecedented and hurt the ambitions of two of America’s largest car companies. Ford Motor Co. (NYSE: F) and Fiat Chrysler Automobiles N.V. (NYSE: FCAU) were bloodied. The news was hard for Ford in particular. Its China sales have been in shambles for over a year, so it is in trouble in two of the three largest car markets in the world.
The European Automobile Manufacturers Association (ACEA) reported: “In April 2020, registrations of new passenger cars in the European Union posted a year-on-year decline of 76.3%. The first full month with COVID-19 restrictions in place resulted in the strongest monthly drop in car demand since records began.”
Fiat Chrysler’s drop was breathtaking. Unit sales fell 87.7% to 10,419. Sales of its flagship Fiat brand fell 86.6% to 8,209.
Ford sales fell from 75.9% to 14,967. Ford’s sales in China dropped 26.1% last year to 567,854, months before the effects of the pandemic. Of the three large markets, Ford is only doing relatively well in the United States.
The Ford restructuring, headed by CEO Jim Hackett, is almost certainly over before it started. The restructuring was meant to save $11 billion and to move Ford heavily into autonomous and electric vehicles. Ford will need to come up with both capital and a stable of new vehicles to complete its transformation. For the time being, that is not possible.
Incidentally, the nations hardest hit in April were Italy, where sales dropped 97.6% to 4,279, and Spain, down 96.5% to 4,163.
It is hard to imagine that, for the year, sales can come even close to recovering to 2019 levels.