After posting a big gain in January, U.S. auto sales moderated last month with most carmakers reporting steady single-digit gains.
Industry executives said they still believed the auto segment of the U.S. economy would continue to grow this year, but the rate of growth would be slower than recent years.
“We will see moderate growth as we go throughout the year,” said Jonathan Browning, chief executive of Volkswagen Group of America.
“We do believe the debate on sequestration and the global economic environment does have a drag on consumer confidence,” Browning said.
Sales of Volkswagens rose 2.9% to 31,456 vehicles compared with the same month a year earlier. It was its best February since 1973.
Even though the leap year made February 2012 one day longer than February 2013, General Motors Co., the nation’s largest automaker, said its sales rose 7% last month to 224,314 vehicles compared with a year earlier.
“The housing sector has now joined auto sales in propelling the U.S. economy forward,” said Kurt McNeil, vice president of GM's U.S. sales operations. “More importantly, the recovery in new home construction is reinforcing the underlying improvement in auto-buying conditions, especially for pickups."
Chrysler Group said its U.S. sales rose 4% last month to 139,015 vehicles compared with the same month a year earlier. It was the company’s best February sales result since 2008.
Ford Motor Co. said its sales grew 9% to 195,822 vehicles. It was the automaker’s best February sales since 2007.
Toyota Motor Corp. said its U.S. sales rose 4.3% to 166,377 vehicles last month.
Hyundai said its sales rose 2% to 52,311. It was the best February for the South Korean automaker since it started selling cars in the U.S. in the 1980s.
“In spite of concerns over reduced consumer confidence related to the end of the payroll tax holiday, we believe these head winds are unlikely to affect the new vehicle market, as we see purchasers of new vehicles as less sensitive to the income reduction,” said Brian Johnson, an analyst with Barclays Capital.
He said the tax increase and economic uncertainly were likely to play a bigger role in the used vehicle market.
Ford analyst Erich Merkle estimated overall U.S. sales for the month will reach about 1.2 million, a gain of about 2% from the same month a year earlier, and represent an annualized selling pace of well over 15 million.
But while sales were up, the number of incentives and discounts car companies were offering for most anything but pickup trucks declined.
“Automakers enjoyed a month of ideal conditions for profitability in February, with incentives down nearly 4% and sales up,” said Kristen Andersson, analyst for auto price information company TrueCar.com. “We expect incentives spending to track within a narrow range the rest of the year as the supply of vehicles and consumer demand are forecasted to increase at similar levels.”
Other analysts were also upbeat, saying the month represented a continued slow-to-moderate growth trend for automakers.
"Similar to previous months, consumers will be lured to dealer showrooms by low finance rates, affordable lease payments and, most importantly, new and compelling product," said Alec Gutierrez, analyst of for Kelley Blue Book. "
He expected the sales results to be skewed toward smaller, fuel-efficient vehicles because gas prices are averaging about $3.75 a gallon nationally, and that typically changes the mix of cars sold during a given month.