Mother Nature chills showroom traffic, sales

Chrysler, Nissan extend volume gains; GM, Ford, Toyota slip

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AutomakerFeb. 2014Feb. 2013Pct. chng.2 month
2 month
Pct. chng.
BMW Group24,56225,697–4%45,44445,976–1%
    BMW division22,01721,3113%40,27037,8247%
BMW Group24,56225,697–4%45,44445,976–1%
Chrysler Group†154,866139,01511%282,049256,74610%
    Chrysler Division25,23025,0831%46,34345,7791%
Chrysler Group†154,866139,01511%282,049256,74610%
Chrysler Group†154,866139,01511%282,049256,74610%
Daimler AG24,97124,0514%49,38448,1103%
    Smart USA94178320%1,4621,26416%
Daimler AG24,97124,0514%49,38448,1103%
Ford Motor Co.183,349195,310–6%336,843361,173–7%
    Ford division176,688190,427–7%324,209352,099–8%
Ford Motor Co.183,349195,310–6%336,843361,173–7%
General Motors222,104224,314–1%393,590419,103–6%
General Motors222,104224,314–1%393,590419,103–6%
Honda (American)100,405107,987–7%192,036201,613–5%
    Honda Division88,86096,623–8%169,668180,760–6%
Honda (American)100,405107,987–7%192,036201,613–5%
Hyundai Group90,22193,816–4%171,237173,831–2%
    Hyundai division49,00352,311–6%93,00896,024–3%
Hyundai Group90,22193,816–4%171,237173,831–2%
Jaguar Land Rover5,5585,05310%11,57910,28213%
    Land Rover4,0063,9053%8,6808,1057%
Jaguar Land Rover5,5585,05310%11,57910,28213%
    Nissan Division105,63190,48917%187,103164,28214%
    Toyota division135,900143,986–6%260,617280,607–7%
    VW division27,11231,456–14%50,60660,474–16%
Volvo Cars NA3,9914,867–18%7,7839,742–20%
Volvo Cars NA3,9914,867–18%7,7839,742–20%

Numbers in this table are calculated by Automotive News based on actual monthly sales reported by the manufacturers and may differ from numbers reported elsewhere.
Source: Automotive News Data Center
Note: *Estimate
†Fiat S.p.A. purchased the remaining 41.46% stake in Chrysler Group from the UAW's VEBA Trust on Jan. 20, 2014.
**Includes estimates for Aston Martin, Ferrari, and Lotus

Nissan North America's car sales rose 8 percent last month. Photo credit: BLOOMBERG

UPDATED: 3/3/14 3:43 pm ET

U.S. auto sales were flat in February as rising showroom traffic in recent weeks fueled hope that the industry would finally break out of its three-month, weather-crimped slump in March.

Total sales fell by just 357 units, or 0.03, percent. Four of the five biggest automakers posted declines, while Chrysler Group and Nissan Motor Co. bucked the trend with double-digit increases. All-wheel-drive specialist Subaru plowed to a 24 percent gain.

General Motors, Ford Motor Co., Toyota Motor Corp., Honda Motor Co. and Hyundai-Kia all cited severe winter weather for a drop in deliveries. And most said traffic improved in the second half of the month as storms and frigid temperatures eased.

The results trailed analysts' forecasts for a slight increase in February sales. The seasonally adjusted annualized sales rate for the month -- 15.4 million -- matched forecasts, rising from 15.3 million a year earlier and 15.2 million in January.

"Heading into February, our expectations were very low; we were expecting another down month, similar to what we saw in January," said Alec Gutierrez, a senior analyst at Kelley Blue Book. "Given some of the challenges that we saw with the month, I would classify this as a good month for the industry and sets us up for a very strong March."

Bill Fay, Toyota division group vice president and general manager, said the late February warm-up left the industry poised for "a strong March."

Kurt McNeil, U.S. vice president of GM's sales operations, said in a statement: "Weather continued to impact the industry in February, but GM sales started to thaw during the Winter Olympic Games as our brand and marketing messages took hold."

Fay said Toyota was hampered last month by disruptions in production and rail service, notably at the company's Canadian assembly operations.

In the first 60 days of the year, Toyota sales are tracking higher in the West, Mountain and South while volumes are off where weather has put a dent in consumer spending, Fay said.

"It will all balance itself out over the next couple months," he said. "We're looking forward to getting this winter behind us. It certainly has delayed some purchases, which should result in a strong spring selling season."

Chrysler's sales rose 11 percent, extending the company's streak of year-over-year gains to 47 consecutive months. Deliveries rose 47 percent to 45,946 units at Jeep, a February record for the brand, and 28 percent at the Ram brand.

Overall, Chrysler Group's light truck sales rose 27 percent, offsetting a 15 percent decline in car deliveries. Volume rose 1 percent at the Chrysler brand and 5 percent at Fiat, but slumped 11 percent at Dodge.

GM's U.S. dealers delivered 222,104 vehicles last month, a drop of 1 percent, with retail and fleet volumes both down 1 percent.

Buick was the only GM brand to post a gain -- 19 percent. Volumes fell 3 percent at Chevrolet and Cadillac, and 1 percent at GMC. Sales of the Chevrolet Silverado pickup dropped 12 percent.

GM: 'Plenty of new products'

GM's closely watched stockpile of cars and light trucks stood at 805,769 units -- equal to an 87-day supply -- at the end of the month.

"Despite a slower start to 2014 than most people expected, we look forward to a very successful year, backed by plenty of new products and what should be the strongest GDP growth since the end of the recession," GM's McNeil said.

Toyota Motor sales fell 4 percent, for the company's third straight monthly decline.

At Ford, sales slipped 6 percent, with volume off 7 percent at the Ford division. Lincoln's U.S. deliveries jumped 36 percent to 6,661 units on MKZ demand.

"Sales surged in the final week, providing us momentum after a slow start to the month," John Felice, vice president of U.S. marketing, sales and service for Ford, said in a statement.

Nissan Motor Co. posted a 16 percent rise in U.S. sales last month, with models such as the redesigned Rogue crossover, Frontier pickup and Altima sedan driving the gains.

Sales at the Nissan division rose 17 percent and Infiniti deliveries advanced 6 percent, the company said in a statement. The Nissan brand has now set a monthly U.S. sales record in 11 of the last 12 months.

Overall, Nissan North America's car sales rose 8 percent and light truck volume surged 31 percent.

Sales of the Rogue jumped 73 percent, Altima deliveries advanced 11 percent and Frontier volumes rose 112 percent.

Fred Diaz, Nissan's senior vice president for U.S. sales and marketing, parts and service, said strong retail demand for Nissan's core models led the gains "despite the frigid temperatures and weather-related challenges."

Weather the storm

Hyundai Motor America said its sales last month totaled 49,003, representing a decline of 6 percent from February 2013.

"I don't like to make excuses, but the awful weather we saw across the country really hurt traffic to our dealerships and ultimately kept our sales at a pace well below what we were expecting," said Bob Pradzinski, vice president of sales for Hyundai Motor America. "They say 'If you want to see the sunshine you have to weather the storm,' so we're all looking forward to some sunshine in March."

Jaguar's U.S. sales rose 35 percent to 1,552 in February -- extending the luxury brand's streak of double-digit, year-over-year gains to 10 months. Its companion brand, Land Rover, reported a 3 percent rise in deliveries.

Audi, which launches the new A3 sedan next month, notched four more sales than last February to preserve a streak of 38 straight months with year-over-year gains.

At Mazda, deliveries dropped 2 percent -- the fourth consecutive monthly decline for the company.

Severe cold and record snowfall across large swaths of the country crimped showroom traffic in early February, extending weather-related weakness that continued in January, when industry sales skidded 3 percent.

At the start of the year, most forecasters predicted a fifth straight year of rising sales for the U.S. industry, to more than 16 million. Last year's tally was 15.6 million.

Soft fleet shipments that also dampened industry volumes in January also undermined February sales. Ford said its fleet sales were off 10 percent in February with winter weather blamed for a delay in some orders. The company said fleet volumes are expected to be made up in March.

Jeep Cherokee sales totaled 11,795 last month.

Ford stockpiles

Ford had 697,000 vehicles in inventory at the end of February, a 91-day supply. That was down from a 111-day supply in January and up from a 71-day supply in February 2013.

Rising inventories and lackluster showroom traffic prompted some automakers and dealers to hike incentives in the final days of February.

TrueCar.com estimates the average incentive per unit will be about $2,633 in February, an increase of 5.1 percent from February 2013 and 3.3 percent higher than January.

"We expect elevated incentive spending to continue," Larry Dominique, president of ALG and executive vice president of TrueCar, said in a statement last week. "March is going to be a 'must-win' month for dealers if they hope to have a successful 2014."

GM and Ford last week ramped up discounts on many models, extending deals through March to lure customers back into winter-ravaged showrooms.

Some of the fattest discounts are being offered by Ford and Chevrolet dealers on full-sized pickups -- $8,000 and more on the 2014 Ford F-150 and $9,000 and more on the 2014 Chevrolet Silverado, according to Internet listings.

Dealers also are sweetening deals on a wider range of cars and light trucks, from low-priced economy cars such as the Chevrolet Sonic to popular crossovers such as the Ford Escape.

In San Antonio, Honda dealers are offering 0.9 percent financing on loans of 24 months to 60 months on some the company's most popular models, such as the Civic, Accord and CR-V.

"We sensed retail demand during the last two weekends in February was relatively good," Wells Fargo analyst Richard Kwas said.

The rise in discounts, along with higher stockpiles, has prompted some fears of an escalating "discount war" among major manufacturers.

"We believe short-term pent-up demand is building, but it's difficult to know when it will be released," analyst Joseph Spak of RBC Capital Markets said. "It could be March or spread out over a few months (and) is also likely dependent on the weather."

Automakers were still able to maintain record transaction prices in February, with the industry average topping $29,000, according to research firm J.D. Power and Associates.

Analyst Brian Johnson of Barclays Capital said U.S. vehicle inventories are down slightly from January, but so far automakers have maintained relatively strong first-quarter production schedules.

"Should inventory levels remain elevated through April, we could see the issue addressed" via higher incentives or production cuts, Johnson said.

Ryan Beene, Mark Rechtin, Bloomberg and Reuters contributed to this report.

You can reach David Phillips at dphillips@crain.com

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