Coverage: Automakers report weak February sales
Major automakers reported lower U.S. new vehicle sales for February on Thursday as consumer demand continued to cool despite strong crossovers and SUV sales.
Nick Carey of Reuters had the news:
“Trucks are higher-margin products and from a mix standpoint, February was disappointing,” said John Toohey, head of equities at USAA Asset Management Company in San Antonio, Texas, which has $166 billion in assets under management. “If this continues, that’s a profitability headwind.”
Total industry auto sales for the month fell 2.4 percent versus February 2017. According to Autodata Corp, which tracks industry sales, the seasonally adjusted annualized rate (SAAR) of U.S. car and light truck sales in February fell to 17.08 million units from 17.45 million a year earlier.
Analysts polled by Reuters had expected a February SAAR of 17.2 million units.
No. 1 U.S. automaker General Motors Co (GM.N) posted a 6.9 percent decline in overall sales from February 2017. The automaker said sales to consumers were down 10 percent “compared to an exceptionally strong February 2017.”
GM’s lower-margin fleet sales climbed 7 percent, driven by a 15 percent rise in commercial vehicles. Crossovers and SUVs fared well in GM’s sales.
Keith Laing of the Detroit News reported that higher trim vehicles did well for Ford:
Mark LaNeve, Ford vice president, U.S. Marketing, Sales and Service, said the Blue Oval is doing well with higher trim vehicles, especially when it comes to trucks and SUVs.
“Our higher trim level vehicles are really resonating with our customers, who are looking for more content and technology than ever before,” he said in a statement. “This is especially true of our trucks and SUVs. Our all-new Ford Expedition and Lincoln Navigator are moving fast, as we work to increase our output to keep up with our customers’ passion for these two vehicles.”
FCA’s Jeep brand posted the only increase for the company, up 12 percent on gains for the Wrangler and the Renegade, up 17 percent and 4 percent respectively.
Jessica Caldwell, Edmunds executive director of industry analysis, said in a statement that auto sales are expected to be sluggish for most of 2018.
David Phillips of AutoWeek reported that the average sale is still higher than a year ago:
The shift to crossovers, SUVs and pickups continues to propel average new transaction prices higher.
Kelley Blue Book estimates the average transaction price for light vehicles in the United States was $35,444 in February, That’s up $722 from February 2017 and $96 lower than January of this year.
“New-car buyers are still willing to pay top dollar for the latest models with the most current features and technology,” said Tim Fleming, analyst for Kelley Blue Book. “Even the new Honda Accord and Toyota Camry are commanding large premiums over their predecessors, despite competing in a rapidly shrinking segment.”
The U.S. new-vehicle market, after seven straight annual gains capped by a record 2016, dropped 1.8 percent to 17.245 million last year.
While tax reform is expected to provide a lift to U.S. sales, analysts say a flood of off-lease vehicles and rising interest rates will likely temper demand for new vehicles this year.