The U.S. auto sales slowed down in February as snow and cold kept buyers at the comfort of their homes. General Motors (GM, Financial), Fiat Chrysler, Honda (HMC, Financial) and Nissan (NSANY, Financial) all saw sales below analysts’ estimates, however managed to record modest sales gains during the month compared with a year ago. Industry analysts had predicted auto sales to see a rise of 8% year-on-year in February, but the figure missed analysts’ bullish expectation and instead rose 5.3%. However, strong trucks sales and low fuel prices somewhat compensated the ill effect of the weather.
This is, in fact, the second consecutive year that the auto industry is witnessing slow growth owing to the severe winters. Ford Motor’s (F, Financial) U.S. sales vice president Mark LaNeve said “there was definitely a slowdown” during the month as the Detroit automaker saw its fleet sales decline and retail sales stagnate. Here’s a lowdown on the performance of the automakers.
The numbers at a glance
According to research firm Autodata, total sales during the month came in at 1,257,619 vehicles. The sales figure translates to a seasonal adjusted annual rate of 16.23 million vehicles, which is way below Reuters’ analyst projection of 16.7 million cars and trucks. Automakers mostly blamed the strong winters in the Northeast and Midwest for the lower-than-expected numbers.
Some automakers also blamed the increase in fuel prices during the latter half of the month as withholding buyers from driving home a new car. John Krafcik of TrueCar said that the extreme cold did more of the damage than anything else. Of the seven top automakers in the economy, six reported sales gain but all were shy of analyst estimates.
General Motors sales in the U.S. rose 4% to 231,378 vehicles in February. The growth was led by strong SUV, truck, van and pickup sales. The recovering U.S. economy and improving employment rate lifted consumer confidence and resulted in higher sales numbers. However, the automaker’s luxury brand Cadillac saw sales tumble 13%.
The situation was no different for Ford’s luxury brand Lincoln which registered a sales drop of -7%. Overall, Ford registered a decline of 2% to 180,383 cars and trucks. The company’s offering took a hit, from Taurus and Focus to Fiesta, Escape, and Edge – all of which saw significant decline in sales. Fiat Chrysler Automobiles saw its sales improve 6% to 163,586 units. It was the best February for the company since 2007 as the company saw success across all its brands – Chrysler, Jeep and Ram.
Japanese automaker Toyota (TM, Financial) experienced double digit sales increase of 13% to 180,467 vehicles during the month. Nissan posted a sales increase of 3% to 118,436 vehicles, while Honda’s sales grew 5% to 105,466 units. This includes Honda’s Acura brand of cars. The RDX and MDX SUVs saw a record month with sales rise of 12.5% to 8,415 units.
Trucks were the flavor of the season
While sales of small cars, family sedans, domestic luxury brands, and hybrid cars were soft, trucks sold in good numbers. General Motors’ Chevrolet Silverado and GMC Sierra pickups continued to show strength with 24% and 6% sales increase, respectively. Chrysler’s Ram pickup sales were up 7% in February.
Ford, on the other hand, reported a mild decline on 1% for its F-Series pickups as the carmaker’s working to expand production with another assembly facility close to Kansas City. The company’s lackluster performance last year was due to its transition to the new F-150 pickup truck. However, if sales remain depressed this year too, the company will come under scrutiny.
As fuel prices were low, demand for Chevrolet Volt hybrid, Nissan Leaf, and Ford C-Max hybrid were down. According to Kelley Blue Book, the average vehicle transaction price in February dropped slightly from the previous month to $33,299. However, this is still $1,145 higher than a year earlier.
Nissan brand chief Fred Diaz expects sales to pick up as the weather gradually turns favorable. John Murph of Bank of America Merrill Lynch forecasts automakers to sell more than 17 million cars and trucks in the U.S. in 2015. Though the year has started on a modest note, it would be interesting to see how the rest of the year unfolds for the auto giants.
