February is turning out to be another good month for auto sales.
"All signs of the industry’s health are positive right now," said John Humphrey, senior vice president of the global automotive practice at J.D. Power and Associates. "Average transaction prices are up, incentives are stable, leasing is at a healthy level and newly redesigned models continue to make an impact on the marketplace."
The auto research firm estimates that February auto sales will reach nearly 1.2 million, about a 7% increase from the same month a year earlier. It will be the fourth consecutive month with the annual selling rate at or above 15.2 million vehicles.
FOR THE RECORD:
Gas prices: In the Feb. 22 Business section, an article about gas prices cited the Automobile Club of Southern California in saying that Southern California had just experienced a record one-month jump in prices, with increases between 57 cents and 59 cents a gallon depending on the area. The Auto Club subsequently determined that the record was 70 cents in the month ended June 20, 2008.
The retail segment of the market remains strong.
"Demand is increasing, but the automakers deserve credit for doing a much better job of keeping alignment of production and demand," Humphrey said. "This has led to new-vehicle transaction prices that are averaging nearly $1,000 more in February than the same period in 2012 while incentives have remained relatively flat year over year.”
Fleet sales -- to car rental companies, commercial customers and government agencies -- will make up about 21% of the market in February.
Other analysts are forecasting a similar outlook for the month. Auto information company Edmunds.com has a higher forecast, estimating the annual sales pace will hit 15.5 million this month.
"Car sales are persevering despite economic factors on people’s minds like rising gas prices and the implementation of the payroll tax," says Jessica Caldwell, an Edmunds analyst. "Pent-up demand and widespread access to credit are keeping up car sales momentum."