Cox Automotive’s latest study suggests that auto sales, which have been making progress, are going to soften again.

A new estimate by analysts suggests the auto industry could be headed for another soft patch as the surge of COVID-19 sweeps across the Sunbelt, where some of the largest markets for new cars are located.

“The surge in COVID-19 cases across the country is negatively impacting consumers and dealers. Almost half of the shoppers delaying their purchase described this as a ‘scary’ time to buy a vehicle,” according to Cox Autotive analysts latest Consumer and Dealer Sentiment Study.

“For those delaying service, almost half say it’s because they’re just not driving as much as they used to. Anxiety is ratcheting up again for consumers and dealers.”

(GM cutting third shift at midsize truck plant.)

General Motors is cutting the third shift at its Wentzville, Missouri plant due to COVID-19 concerns.

Cox analysts noted last month that the demand for new vehicles seemed to lose momentum towards the end of June as the number of COVID-19 cases increased in Florida and Texas.

The trend has rolling into July as the numbers continue to rise in Florida and Texas, setting records during the past two weeks. In addition, the governor of California has re-imposed restrictions on some activities across Southern California and hospitals in Arizona have been overwhelmed by new COVID-19 cases.

Consumer concern has risen significantly with the case count and Cox said 70% of the consumers they surveyed say they are now “extremely or very concerned, which was an increase from the levels in the June survey.”

(Dealers need to get used to online sales, study sales.)

According to Cox, consumers also have begun to travel less and financial uncertainty has increased. Meanwhile, the impact of COVID-19 is continuing to reach into other parts of the business.

Ford’s President of North America Kumar Galhotra said the automaker could face engine and parts shortages due to COVID-based restrictions in Mexico.

GM confirmed this week that it has dropped a shift, employing 1,250 workers at a plant in Wentzville, Missouri because concerns about COVID-19. Cases in Missouri also have increased in recent weeks.

Ford Motor Co. also has confirmed that it could face a shortage of engines and other components made in Mexico as soon in Mexico due to restriction imposed to help limit the spread of the deadly virus.

“Due to COVID-19, the State of Chihuahua in Mexico has limited employee attendance to 50%, a region in which we have several suppliers,” Kumar Galhotra, Ford president, Americas and International Markets Group, said in a statement.

(Toyota sees retail market bouncing back fast, but warns there could be “lumps” ahead.)

“With our U.S. plants running at 100%, that is not sustainable. While we do not expect any impact to production this week, we are continuing to work with government officials on ways to safely and constructively resume remaining production.”

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