U.S. auto sales expected to rise from weak January

Staff/wire report

Automakers and dealers may be wishing this was a leap year because an extra selling day in February may have come in handy.

Almost every company reported U.S. sales declines compared with February, 2018 as the long-predicted slowdown appeared to finally take hold, according to Forbes.

Michelle Krebs, Cox Automotive’s Autotrader executive analyst, told The Vindicator on Friday, “February, like January, is one of the weakest months of the year for vehicles. And January got off to a slow start due to frigid weather and storms.

“We had been at the optimistic spectrum of analysts’ forecasts, forecasting a seasonally adjusted rate [SAAR] of 17.1 million, due to economic strength, consumer confidence and stock market rebounded, interest rates held steady, incentives were beefier – and a make-up of sales lost in January. But it looks like it will be less than that – well below 17 million and below last year. The weaker-than-expected February could be due to the weather and possibly slower and lower tax refunds,” she said.

Overall, this year should be weaker than last, Krebs said, due to affordability challenges, and high number of off-lease vehicles entering the market to compete with new models.

For February, GM sales were forecasted by Cox Automotive to be down 1 percent.

Analysts have cited rising vehicle prices and interest rates, costs related to import tariffs and cold weather as among reasons for slowing new vehicle sales, Charlie Chesbrough, senior economist at Cox, said to Forbes in emailed comments.

Relatively strong sales of pickup trucks and SUVs weren’t enough to prop up the overall numbers for some companies. An example is Fiat Chrysler Automobiles. Its Ram truck brand reported a record February with sales increasing 24 percent over February 2018.

According to a forecast released by Cox Automotive, sales volume of 1.31 million units forecast for February is expected to up 0.7 percent over last year, as some delayed purchases from the prior month lift the market.

As the year progresses, affordability, tariffs, off-lease volume and car share are all market influences that could affect the new-car market, analysts said.