Winter Chills February Auto Sales, Look For Bigger Discounts In March – Forbes
U.S. auto sales in February are expected to be only slightly above the same month a year ago, thanks to severe winter weather.
There are positive signs for a stronger spring selling season, though, once the weather improves. Automakers are scheduled to report February sales on Monday, March 3.
Cars.com, Chicago, estimated that February sales would be up only about 1.1 percent in February vs. the same month a year ago, to about 1.2 million units. Still, that would be the best February sales since 2008, Cars.com said.
“February would’ve been much better if not for the weather. Weather was a factor but not the only factor in play,” said Jesse Toprak, chief analyst for Cars.com.
For instance, Toprak said auto sales correlate strongly with stock market performance, and stocks generally took a hit in January.
On the positive side – from the consumer point of view – inventories crept higher and automakers can be expected to roll out more generous discounts in March. That’s a drag on earnings for the car companies but good news for anyone who’s in the market for a new car or truck.
“Some dealer groups were complaining they had too much inventory – especially domestics, especially trucks,” Toprak said in a phone interview on Feb. 26.
According to Automotive News, the U.S. auto industry had an 88-day supply of new cars and trucks as of Feb. 1, up from 64 days on Jan. 1. A 60-day supply is considered optimum.
Toprak said incentives were down in February. “If people can’t get to the dealership because of the weather, there’s no sense in putting $5,000 (in incentives) on the hood,” he said.
Kelly Blue Book, Irvine, Calif., reported this week it also expects U.S. auto sales of about 1.2 million in February. That works out to a Seasonally Adjusted Annual Rate of about 15.3 million, even with a year ago. The SAAR is a sales estimate for the full year, based on one month’s worth of sales.