February U.S. auto sales were not as strong and resilient as expected despite higher incentives and strong demand for trucks. While car sales plunged 13%, light truck sales spiked 7% for the month. The industry saw a second consecutive month of sales decline after witnessing sales drop in January due to cold spells in the U.S. Overall sales for February were down 1.1% to 1.33 million vehicles as compared to last year. The seasonally adjusted annual sales rate stood at an impressive 17.57 million units, however, leaving a ray of hope for the automakers as selling season approaches.
Here’s a comprehensive look at February auto sales in the U.S.
Winners and losers
General Motors (NYSE:GM) said its sales climbed 4.2% in February to 237,388 units. This is attributed to the healthy performance seen by Chevrolet and GMC, registering respective sales surges of 3.4% and 17%. In contrast, Buick and Cadillac witnessed sales declines of 9.4% and 8.6%. Trax and Equinox SUVs registered their best-ever February sales.
Ford Motor (NYSE:F) said sales plunged 4% in February. This marks the fourth sales decline in the last six months. Although light pickup trucks saw strong sales volume, it was not able to compensate for the steep fall in car deliveries. Ford F-Series pickups sold well, an 8.7% hike for February to 65,956 units. While Lincoln sales were up 8.8%, Ford division sales dropped 4.5%. SUV sales surged 24%.
The third-largest automaker, Fiat Chrysler (FCAU), saw its sales plunge 10% in February, selling 168,326 vehicles. Ram sales increased 4%, while Jeep sales dropped 15%. The company has discontinued several of its smaller car models. As the company is currently undergoing product changes and restructuring in the Jeep manufacturing units, its sales are being affected.
Nissan (NSANY) sales improved 3.7% as the company’s brand sales went up 1.2% and sales at Infinite surged 33%. Moreover, Nissan said the combined sales of crossover, pickups and SUVs totaled 61,870 units, representing a 22% sales gain.
Honda (NYSE:HMC), too, was among the winners as it posted a 2.3% increase in sales by selling 181,686 vehicles in February. The improvement was powered by a 15% sales gain in trucks, crossovers and SUVs. In contrast, Acura sales were down14.9% to 10,864 units.The decline, however, did not offset the positive sales figure.
Toyota (NYSE:TM) said its sales plunged 7.2% to 174,399 units as its brand sales decreased 5.4%. This was coupled by weak Lincoln sales of 18,338 units, down 20.6% in comparison with last year's comparable period. SUV sales were up 14.3%.
Bill Fay, Toyota division’s group vice president and general manager, was happy to note the “industry sales in February topped a 17 million unit pace for the eighth straight month.”
Analysts sense some trouble ahead as automakers are on an incentive spree to do away with their inventories. Incentives such as heavy discounts would impact the bottom line. Tom Libby, head of automotive industry analysis said, “Dealers and manufacturers now need to use more tactics such as aggressive conquest programs, cash incentives and attractive financing terms to achieve year-over-year sales increases, and we can expect more of this as the year progresses.”
It will be interesting to see how the rest of the year unfolds for automakers.
Disclosure: I do not hold any position in the stocks discussed in this article.
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