Ford Motor Co. and General Motors’ U.S. sales dropped in February on weaker car and retail deliveries.
GM, which posted a 6.9 percent decline, said fleet sales rose 7 percent, driven by a 15 percent increase in commercial shipments, while retail volume slipped 10 percent “compared to an exceptionally strong February 2017.”
Demand fell 8.8 percent at Chevrolet and 8 percent at Buick, but rose 1.2 percent at GMC and 14 percent at Cadillac.
While light-truck demand remained strong, GM’s car sales totaled 46,914 last month, down 16 percent.
At Ford, volume dropped 6.9 percent, with retail sales off 8.5 percent and fleet down 3.8 percent. Volume dropped 6.1 percent at the Ford division and 23 percent at Lincoln. While pickup demand remained strong, Ford posted weaker car and SUV sales.
FCA US reported a 1 percent decline in U.S. sales last month behind lower fleet deliveries and a 14 percent drop at the Ram brand.
Every FCA brand except Jeep and Alfa Romeo posted a decline for the month. FCA said fleet sales fell 3 percent compared with February 2017. Jeep shipments rose 12 percent — the second consecutive monthly gain after a 16-month string of declines. Demand dropped 3 percent at the Chrysler brand, 8 percent at Dodge and 42 percent at Fiat.
When other automakers report results later today, analysts expect the industry to record a decline for February. Cox Automotive and Edmunds see deliveries dropping about 4 percent compared with February 2017. Incentives dropped slightly from year-earlier levels, J.D. Power says.
Sales last month continued to be driven by healthy light-truck demand, notably crossovers, while car and fleet volumes remained weak. Low financing rates and gasoline prices as well as steady job gains are supporting industry sales, automakers and analysts say.
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.
Overall, U.S. sales are forecast to drop below 17 million for the first time in three years, with most 2018 estimates from analysts ranging from 16.7 million to 16.9 million units. Sales rose 1.2 percent in January.
SAAR outlook
Analysts polled by Bloomberg expect the seasonally adjusted sales rate for February to come in at 16.9 million, down from 17.46 in February 2017 and January’s 17.18 million rate. GM on Thursday estimated the SAAR will tally 17.1 million in February.
Company outlook
Ahead of today’s reports, February sales were projected by analysts polled by Bloomberg to rise at just two major automakers: Toyota Motor Corp., with an anticipated 3.7 percent gain, and Volkswagen-Audi, with a 4.1 percent projected increase.
February deliveries were expected to fall 4.5 percent at General Motors, 6 percent at Ford Motor Co.; 11 percent at FCA US; 3.1 percent at Nissan Motor Co., 2.3 percent at Honda Motor Co. and 5.2 percent at Hyundai-Kia.
Spiffs
The average new-vehicle incentive was tracking at $3,840 in the first three weeks of February, J.D. Power says, down $14 from a year ago. But ALG estimates average incentives rose 5.3 percent to $3,656 last month compared to February 2017, while dropping 1.9 percent from January. General Motors, Nissan and FCA were the biggest spenders on deals last month, ALG data show. (See chart below.)
Odds & Ends
There were 24 selling days last month vs. 24 in February 2017 … J.D. Power says days to turn, the average number of days a new vehicle sits on a dealership lot before being sold to a retail customer, was 70 through Feb. 18, flat with the same period in Feb. 2017 … Light trucks accounted for 67 percent of U.S. light-vehicle deliveries in the first three weeks of the month, the highest level ever recorded in February, J.D. Power says … Incentives, expressed as a percentage of sticker price, stood at 10.2 percent in early February, matching or exceeding the 10 percent threshold for the 19th time over the last 20 months, J.D. Power says.
Quotable
“Inventory out on dealer lots is growing, so we expect to hear announcements from automakers about extending summer shutdowns soon. Plants that have a high concentration of car assembly rather than light truck assembly will likely be affected by extended shutdowns.” — Ray Telang, U.S. Automotive Leader for PwC
“Detroit 3 volume slips on weak retail, car demand” originally appeared in Automotive News on 3/1/2018
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