February auto sales: Ford, Chrysler, VW, General Motors gain speed
Auto sales continued to strengthen in February, helped by improving consumer confidence and easing credit concerns.
Chrysler Group, Ford Motor Co. and Volkswagen of America all posted big U.S. sales gains last month. General Motors Co. squeezed out a small gain.
Several analysts have raised their estimates for total sales this year because of the improving economy.
“Concerns about the financial crisis in Europe are not holding back the momentum of the automotive recovery in the U.S.,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “The industry is currently well positioned for the best performance since 2007.”
LMC raised its annual sales forecast to 14 million vehicles this year from 13.8 million. Others believe sales could be as high as 14.5 million.
Chrysler said its U.S. sales rose 40% in February, compared with the same month a year earlier, to 133,521 vehicles. It was the automaker’s best February since 2008 and its ninth-consecutive month of sales gains of at least 20%.
Chrysler has benefited from a more fuel-efficient product range that has helped the company grow even though gas prices are rising.
“A few years ago higher fuel prices were a major threat to our total vehicle sales whereas today those higher prices have become far less of an issue,” said Reid Bigland, Chrysler’s sales chief. “We now have 13 vehicles with an EPA-rated highway fuel economy of 25 miles per gallon or higher, and six of those vehicles get 31 mpg or higher.”
Volkswagen of America said sales of its VW brand rose almost 43% to 30,577 vehicles, its best February since 1973.
The gain reflects both “increasing consumer confidence in the marketplace and strong interest” in fuel-efficient cars, said Jonathan Browning, chief executive of Volkswagen Group of America.
Ford said its February sales increased 14% to 179,119 vehicles. Sales of its small Focus sedan more than doubled to 23,350, a reflection of consumers’ buying smaller, more efficient vehicles as gas prices climb.
Erich Merkle, Ford’s sales analyst, said the month started out slow but then sales picked up momentum.
A better economy is behind the upturn in the industry, which started last fall and has gained strength through the winter months as Asian automakers recovered from inventory shortages caused by last year’s Japanese earthquake and flooding in Thailand.
“You look at the various things happening out there in the economy. Claims for unemployment are coming down. Jobs are being created while we would like it to be better. Consumer confidence is on the upswing,” Merkle said.
The one wrinkle is gas prices, but Ford and other makers are in a much better position to survive a spike because they have retooled their lines to offer vehicles with greater fuel economy than the models they sold just three or four years ago.
General Motors said its February sales rose 1% to 209,306 vehicles. It had a strong February a year ago and was not expected to log a big gain.
Looser consumer credit also is helping. Leases, which almost died away during the recession, now account for about 20% of the market. Dealers also are selling more vehicles with 72-month loans because of easing credit conditions.
“We’re seeing a rebound in leasing and a slight improvement in credit availability, which is bringing customers that were shut out of the market two or three years ago back into dealerships,” said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. “Both of these elements bode well for consumers in terms of making vehicles more affordable, which will drive more traffic into showrooms.”
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