Warm winter = stronger sales

As a massive February storm brought a belated winter blast to Colorado Friday, NADA chief economist Paul Taylor offered one reason for the year’s strong sales start: “Dramatically warmer weather than normal.” Despite January’s 14.2 million adjusted selling rate, he’s sticking with his earlier forecast for the full year: 13.945 million light vehicles in the U.S. That would mark the third straight annual increase in the 10 percent range. What’s behind the projection? A growing economy, low interest rates, an aging vehicle population that needs replacement, and vehicle stocks recovering from last year’s natural disasters in Asia. By the end of the first quarter, inventories at Honda, Toyota and Subaru will be back to typical levels, Taylor says. That means competition will head up … and some automakers will respond with higher incentives.

You can reach Dave Versical at dversical@crain.com.