February U.S. Auto Sales: Better, but Not By Much
Incentive spending increases in February, but expect even more discounts in March
February Sales Up, But Not By Much
With February U.S. auto sales reports scheduled to be released tomorrow, Forbes cites Cars.com’s estimates as indicating that 2014’s figures will not improve considerably upon last year’s figures. While a 1.1 percent increase in year-over-year sales gains would nonetheless make February U.S. auto sales the best they have been since 2008, it is certainly a far cry from the rebound that the industry had hoped for after a less-than-stellar January.
A number of sources expect February U.S. auto sales to top out at 1.2 million units, which would only slightly improve February 2013’s 1.19 sales total and the 1 million model sales mark of last month.
Dealerships Holding Out for March
As with winter, the bright spot of spring is at the end of the tunnel (or Polar Vortex, as it were), and reports indicate that dealerships countrywide have more than enough inventory to push them through an expected March rebound. Automotive News reports that the automotive industry had an 88-day supply at the beginning of last month; a 60-day supply is considered the optimum for dealerships.
This likely indicates that dealerships across America will be offering bigger incentives on vehicles during March as a way to tempt car buyers out of their hidey-holes.
“Some dealer groups were complaining they had too much inventory—especially domestics, especially trucks,” Jesse Toprak, chief analyst for Cars.com told Forbes in a phone interview on Feb. 26.
February U.S. Auto Sales Breakdown: Nissan Soars, Ford Falls
The International Business Times offers a breakdown of units sold, year-over-year and month-over-month change, and the market share of each major automaker.
Consistent with Consumer Reports’ Top Pick 2014, Ford continues to decline with car buyers with a five percent year-over-year decrease in sales and a 1.4 percent dip in market share.
Volkswagen was the biggest loser in year-over-year sales, selling more than 5,000 fewer models in February 2014 than it did in the same month last year (-12.5 percent). Volkswagen was also the month’s largest grower in incentive spending, meaning that their profit margin in February was already taking a hit of about $2,581on each unit.
Nissan was arguably the winner in the February U.S. auto sales report, with a 16.3 percent year-over-year sales increase and a 28.1 percent month-over-month increase. Nissan’s market share rose by .5 percent, and their incentive spending was only .2 percent above industry average.
With the compact crossover segment being February’s biggest grower (162,000 estimated units and a 12.2 percent YoY increase), it’s reasonable to assume the Nissan Rogue will be among February’s best-sellers. Mid-sized cars (-7.4 percent), compact cars (-3.2 percent), and full-size pickup trucks (-3.4 percent) were all down in sales, suggesting that march will see a number of hefty discounts offered on vehicles that have been slow to move during the first two months of 2014.
After Presidents Day sales saw incentives on GM-manufactured trucks up to around the $7,000 mark, the sky may very well be the limit for dealerships looking to incentivize purchasing a new vehicle in March.
We want to hear from you: were you a new car buyer in February? If so, what did you buy and why?