U.S. auto sales growth slows in February
After months of big gains, the U.S. auto industry dropped into a lower gear last month with sales slowing to single digit gains for most of the big car companies.
Still, car shoppers appear to be shrugging off economic factors such as higher payroll and income taxes as well as the ongoing budget debates and spending reductions in Washington.
February auto sales in the U.S. grew 3.7% year over year to about 1.2 million vehicles. The gain came even though February had one fewer day than in the previous, leap year.
“The recovery in home prices is building customer confidence, credit is available and affordable, and consumers appear to be taking higher payroll taxes in stride, at least when it comes to replacing older vehicles,” said Kurt McNeil, vice president of General Motors’ U.S. sales operations.
Those factors and the average age of cars on the road — about 11 years, according to R.L. Polk & Co. — have boosted auto sales, automakers said.
There also seems to be no immediate impact from the current debate in Washington over “sequester” budget cuts, said Lacey Plache, an economist at auto information company Edmunds.com.
“You have to wonder if consumers are just becoming tone deaf to all of this noise that keeps popping up in Washington,” Plache said.
Industry executives said they still believed the auto segment of the U.S. economy would continue to grow this year, but at a slower pace than in recent years.
“We will see moderate growth as we go throughout the year,” said Jonathan Browning, chief executive of Volkswagen Group of America.
Though gas prices were high during the month, truck sales shined, probably a reflection of the improving housing industry, which spurs truck sales to builders, electricians, plumbers and others.
“You have such an aging pickup truck fleet that’s in need of replacement, and you also see this renewed cycle in construction,” said Erich Merkle, sales analyst at Ford Motor Co.
GM did particularly well. Combined sales of the Chevrolet Silverado and GMC Sierra outsold Ford’s popular F-Series pickup line. GM truck sales were up more than 25%. But the Ford F-Series also had a good month, with sales rising 15%. Sales of Chrysler Group’s Ram pickup and Toyota’s big Tundra also increased.
Although gas prices rose steeply last month, small and fuel-efficient cars didn’t get the same sales boost they experienced during other fuel price spikes.
Sales of Toyota’s Prius hybrid lineup fell almost 14%. Ford’s Focus compact sedan slipped 11%. Nissan’s Altima family sedan saw sales drop almost 16%.
Sales at GM, the nation’s largest automaker, rose to 224,314 vehicles last month, a 7.2% increase compared with a year earlier, according to Autodata Corp.
Chrysler’s sales last month rose to 139,015 vehicles, 4.1% more than in the same month a year earlier. It was the company’s best February sales result since 2008.
Ford sales grew 9.3% to 195,310 vehicles, the automaker’s best February sales since 2007.
Toyota Motor Corp. U.S. sales rose 4.3% to 166,377 vehicles last month.
Hyundai said its sales rose 2.3% 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.
Honda and Nissan were the only major automakers to stumble last month. Honda’s sales fell 2.0% to 107,987 vehicles. Nissan’s sales fell 6.6% to 99,636 vehicles.
While most carmakers’ sales were up, the number of incentives and discounts offered 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, an analyst for auto price information company TrueCar.com.
