Cold spells, snowfalls, a fluke and an asterisk
January U.S. light-vehicle sales down 3 percent? Welcome to 2014. We’re gonna have more months like this.
It’s probably going to be another good sales year. But modest baseline growth can’t carry the whole industry through a month that has even one, let alone multiple, bad events.
And January had a couple of doozies, plus a fluke and an asterisk. The obvious one was the brutal weather -- midmonth and end of month afflictions so bad we needed a special name, the polar vortex.
Less noted was the impact on fleet sales from a federal tax break that expired Dec. 31. It wasn’t clear that small businesses and fleet buyers flocked to buy in December to get their full Section 179 deduction, but January fleet sales were quite weak: down 14 percent at Ford and 18 percent at General Motors. But I count it as a blow to January sales.
My asterisk is excellent year-ago sales. January 2013 was a boom month, up 14 percent industrywide. So this year it’s harder to impress. Look at the major players down the most last month: GM, Ford and Toyota down between 7 and 12 percent. A year earlier, that trio led the market, rising between 16 and 27 percent.
Finally, Toyota’s fluke stop-selling order on anything with a seat heater because the fabric enclosing the heating unit doesn’t meet flammability standards. When did it hit? The last two days of the selling month.
Sales postponed in January because of the severe cold spells and record snowfalls in some parts of the country will come back in February or March, if the weather cooperates. Lower fleet sales might linger awhile. Not all months this year will suffer by comparisons with the year-earlier period.
But even if sales top 16 million in 2014, we can expect at least a few months’ numbers will be stinkers.
You can reach Jesse Snyder at email@example.com.