Extreme Weather Hurts U.S. Auto Sales in January
U.S. light-vehicle sales dipped 0.4% year over year to 1.14 million units in Jan 2016. Sales were adversely affected as snowstorms prompted many customers to postpone their purchases to February. Moreover, the month had one fewer weekend and two fewer selling days than Jan 2015, which also impacted sales volume.
Consequently, sales on a seasonally adjusted annualized rate (“SAAR”) basis increased to 17.55 million units in Jan 2016 from 17.32 million units in Dec 2015 and 16.71 million units in Jan 2015. This is the highest SAAR for any January since 2006.
Among the six major American and Japanese automakers, FCA US LLC – controlled by Fiat Chrysler Automobiles FCAU – recorded the maximum year-over-year sales improvement in Jan 2016. Meanwhile, General Motors Co. GM led in absolute figures for the month.
Now, let us take a look at the U.S. sales figures reported by individual automakers.
U.S. Automakers
General Motors recorded 203,745 vehicle sales in January, marking a 0.5% year-over-year increase. This is the company’s best January sales in eight years. Further, retail sales improved 9%, while commercial deliveries rose 6%.
Ford Motor Co. F reported a 2.6% decrease in U.S. sales from the year-ago period to 173,723 vehicles in Jan 2016. Sales volume of the Lincoln brand vehicles advanced 8.4% year over year to 7,177 units in the month. Sales of the Ford brand fell 3% year over year to 166,546 vehicles.
FCA US recorded a 7% year-over-year rise in sales to 155,037 vehicles in Jan 2016. With this, the company’s monthly sales have increased year over year for 70 consecutive months. This impressive feat also marks the best January sales for the group since 2009.
Japanese Automakers
Toyota Motor Corporation’s TM sales declined 4.7% year over year to 161,283 units in Jan 2016. Sales in the Toyota division dropped 3.9% to 140,350 units. Lexus’ sales went down 9.5% to 20,933 units.
Honda Motor Co., Ltd. HMC recorded a 1.7% year-over-year decrease in sales to 100,497 vehicles in the month. Sales in the Honda Division went up 0.05% to a record 90,247 units in Jan 2016. However, sales of the Acura Division fell 14.5% to 10,250 vehicles.
Nissan Motor Co. Ltd. NSANY reported a 1.6% year-over-year improvement in sales to 105,734 vehicles in January, a record for the month. Sales in the Nissan division went up 2.9% to 97,220 units, also a January record. However, sales of the Infiniti Division plunged 11.8% to 8,514 units.
Outlook
While auto sales were weak in January, most analysts expect U.S. auto sales to improve in 2016, driven by rising employment and personal income as well as low fuel prices, easy availability of credit and high pent-up demand.
Moreover, the high average age of cars on the U.S. roads should continue to boost replacement demand for cars. However, the pressure to maintain the attractive incentives and deals offered last year may strain the margins for automakers.
Nevertheless, the U.S. auto sector looks set for another good year. Strong auto sales also bode well for the overall U.S. economy as the automobile industry is a major contributor to economic growth.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
FORD MOTOR CO (F): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
NISSAN ADR (NSANY): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
