Weak U.S. Auto Sales Continue
The cold weather continued to hamper the U.S. auto sales in Feb, 2014. Sales during the month inched down 0.03% from the year-ago level to 1.19 million. Sales on a seasonally adjusted annualized rate (:SAAR) basis increased to 15.4 million in Feb, 2014 from the year-ago level of 15.3 million units.
Most large automakers like Ford Motor Co. (F), Honda Motor Co., Ltd. (HMC), General Motors Company (GM) and Toyota Motor Corp. (TM) witnessed a year-on-year dip. However, Chrysler and Nissan Motor Co. Ltd. (NSANY) reported increase in sales in Feb, 2014. Nissan led in terms of year-over-year increase in sales, while Honda witnessed the maximum slump.
Let's look at the U.S. sales figures reported by the individual automakers.
U.S. Automakers
General Motors recorded 222,104 vehicle sales in February, declining 1% year over year. Retail sales and fleet sales also inched down 1% each. The company is set to launch many vehicles in 2014, which are likely to improve sales in the coming months.
Ford reported a 6% decline in total sales from the year-ago period to 183,947 vehicles in Feb 2014. Retail sales fell 4% year over year to 125,919 units. Fleet sales plunged 10% as the company faced problems in delivering vehicles on time due to cold weather.
Chrysler Group – controlled by Italy’s Fiat S.p.A (FIATY) – recorded an 11% year-over-year rise in sales, bringing the figure to 154,866 vehicles. Chrysler witnessed year-over-year increase in monthly sales for 47 consecutive months. Moreover, this is the best February sales for the group since 2007.
Japanese Automakers
Toyota’s sales declined 4.3% year over year on both volume and daily selling rate (:DSR) basis to 159,284 units in Feb, 2014. Sales in the Toyota division deteriorated 5.8% based on both volume and DSR to 140,429 units. However, Lexus sales rose 8.7% on both DSR and volume basis to 18,855 units.
Honda recorded a 7% year-over-year decrease in sales on DSR and volume basis to 100,405 vehicles in Feb, 2014. The 8% decline in sales in the Honda Division to 88,860 units offset the 1.6% increase in sales of the Acura Division to 11,545 vehicles.
Nissan Motor posted a 15.8% year-over-year increase in sales to 115,360 vehicles in February. Sales in the Nissan division also climbed 16.7% to 105,631 units. Even the sales of the Infiniti Division hiked 6.4% to 9,729 units in the month.
Outlook
The cold weather in December and January continued in February, leading to another weak month for the U.S. auto sales. However, sales showed recovery in the second half of the month. As a result, due to the combined effect of delayed purchases and the beginning of the spring selling season, sales are expected to be strong in March.
Meanwhile, the outlook for 2014 remains strong. In the long term, sales are expected to rise on the back of strong pent-up demand, easier car financing and low gas prices. Additionally, improving macroeconomic conditions such as low interest rates, reduced unemployment rates and recovery of the housing market are likely to boost sales. These catalysts are expected to drive the U.S. auto sales to pre-recession levels.
As the automobile sector is a key industry for growth, improving auto sales will help in reviving the overall U.S. economy. Ford expects the U.S. industry volume to range between 16–17 million units in 2014, compared with 15.6 million units sold in 2013. Meanwhile, General Motors expects industry sales in the range of 16–16.5 million in 2014, while Toyota expects it to be about 16 million.
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