The Unexpected Way COVID-19 Is Devastating Automakers
The ripple effect from the COVID-19 pandemic has disrupted the automotive industry as much as many others. Major automakers such as Ford (NYSE: F), General Motors (NYSE: GM) and Fiat Chrysler Automobiles, have closed factories; suppliers have levels of uncertainty never seen before; and off-lease vehicles are stacking up with no auctions to move them, sending residual values plunging. Let's also not forget that dealership traffic has been devastated, so most new-vehicle sales plunged in March and April.
All of that was mostly expected. But now major automakers face a mostly unforeseen issue: lacking inventory of their most profitable products. Let's take a look at more resilient pickup sales, why inventory is waning, and how much that could devastate automakers' profits.
For Detroit automakers, full-size pickup trucks have often been bread-and-butter products. They often prove more resilient to downturns, as American consumers see them as tools for work. Put simply: Americans will pretty much buy pickup trucks anytime, anywhere.
Source Fool.com
