Good news fuels 4% gain in Feb. sales
For most of last year, auto sales gained steam in spite of considerable economic uncertainty.
Now automakers say they finally are getting help from an improving housing market and rising consumer confidence, two factors that helped push U.S. new-vehicle sales 4 percent higher in February.
"We have not seen a February this strong since 2008," Kurt McNeil, General Motors vice president of U.S. sales operations, said during a conference call last week. "The difference between then and now is that the escalator is heading up and not down."
The industry's seasonally adjusted, annualized selling rate increased to 15.36 million, up from 15.28 million in January and 14.47 million a year ago.
February was the fourth consecutive month with a SAAR of more than 15 million, as shoppers were unfazed by higher gasoline prices and the prospect of big cuts in federal spending that started to take effect late last week. As in January, consumers showed no signs of trepidation related to the expiration of a payroll tax cut that reduced monthly income.
"Vehicle-buying fundamentals are healthy, as the selling rate attests," McNeil said. "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."
Sales rose 9 percent at Ford Motor Co., 7 percent at GM and 4 percent at Chrysler Group, which has now posted year-over-year gains for 35 straight months. But Chrysler warned that its total volume for the first quarter would be lower this year because of model-changeover activities at some plants.
All four of GM's brands increased sales by more than the industry average, led by a 20 percent gain for Cadillac. But Dodge was the only Chrysler brand to top the overall industry. At Ford, an 11 percent increase for the Ford brand was dragged down by a 29 percent decline for Lincoln, which managed sales of more than 1,000 units for only one of its five nameplates.
Honda Motor Co. was down 2 percent, and Nissan Motor Co. was down 7 percent. Sales were up 4 percent for Toyota Motor Corp. but down for two of its high-profile nameplates, the Camry and Prius. Kia Motors Corp.'s sales were down 8 percent.
Subaru sales grew 11 percent to 28,163, a February record for that company. Mercedes-Benz sales rose 23 percent, widening the brand's lead in the luxury segment over BMW, whose sales were up 1 percent.
A 28 percent increase for Audi helped Volkswagen Group of America to a 10 percent gain.
Automakers expressed optimism about more growth in the months ahead, as the spring selling season arrives and some prominent new vehicles, including redesigned full-sized pickups from GM, are on the way. Ford said it plans to build 800,000 vehicles in the second quarter in North America, up 9 percent from a year earlier.
"The housing recovery is under way," said Ford's chief economist, Ellen Hughes-Cromwick.
Truck sales stand to benefit enormously from a long-awaited increase in new-home construction. That is particularly good news for the Detroit 3, which generate the bulk of their profits from trucks.
Ford sales analyst Erich Merkle said full-sized pickups represented 12.3 percent of industry sales, up from 10.7 percent a year ago.
GM sold 28 percent more full-sized pickups in February, with the combined total of 55,776 Chevrolet Silverados and GMC Sierras edging out Ford's F series, which posted a 15 percent gain to 54,489. Sales of Chrysler's Ram pickup, the subject of a critically acclaimed Super Bowl ad Feb. 3, increased 3 percent to 23,289.
The F series accounted for 28 percent of Ford's sales last month, up from 26 percent in February 2012. The Silverado and Sierra accounted for 25 percent of GM's sales, up from 21 percent. GM said its pickup sales to small businesses rose 40 percent, an indication of strengthening confidence in the economy.
Jessica Caldwell, senior analyst with Edmunds.com, said sales in February started out "a little lackluster" but surged when automakers rolled out Presidents Day sales events in the middle of the month.
Caldwell said this month's results will be watched especially closely because March is typically among the best sales months each year.
"If we have a good March," Caldwell said, "we're definitely poised to have a very good 2013."
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