DETROIT -- U.S. auto sales are on pace for the best February since 2002, forecasters say, even as relentless snow slowed demand in the Northeast.
February is expected to mark the 12th consecutive month of year-over-year gains for the industry. Analysts said sales have been minimally affected by rising gasoline prices and a work stoppage at West Coast ports that could reduce March inventories of some vehicles imported from Asia.
TrueCar, LMC Automotive and Kelley Blue Book are forecasting this month’s sales to be between 8 and 9 percent higher than in February 2014. That would translate to a seasonally adjusted, annualized selling rate of 16.6 million to 16.7 million, which is roughly the same as January’s SAAR.
Automakers are scheduled to report February sales, which include transactions through Monday, March 2, on Tuesday, March 3.
“Strength at the start of 2015 is a key factor in keeping the industry on target to surpass annual vehicle sales of 17 million units for the first time since 2001,” Jeff Schuster, LMC’s senior vice president of forecasting, said in a statement.
“Given all the positive factors, including the economy, gas prices and fresh new products in showrooms, rain clouds are expected to stay out of the auto sales forecast for the duration of 2015.”
U.S. new-vehicle sales totaled 16.5 million in 2014.
Leasing boom
Leasing is a big reason sales are continuing to rise. J.D. Power, which provides the registration data used in LMC’s forecast, said leasing penetration in the first 11 days of February climbed to a record 27.4 percent of retail sales, as strong residual values make lease deals more attractive to shoppers.
Sales are also being propelled higher by falling unemployment rates, a healthy stock market and other positive economic indicators. Incentive spending declined 2.9 percent from a year ago, TrueCar said.
“Automakers should expect to post net revenue gains this month, Eric Lyman, TrueCar’s vice president of industry insights, said in a statement this week. “With overall restrained incentive spending, natural consumer demand is driving the increase in sales this month.”
Toyota Motor Sales is likely to post the biggest year-over-year gain among major automakers, rising from 13 to 18 percent, according to the KBB and TrueCar forecasts. American Honda also is expected to report a double-digit increase.
TrueCar projected that Subaru also will report a big jump, as will Kia, aided by what it said amounts to a 35 percent rise in incentives from February 2014. Kia’s per-vehicle spending was $3,000, TrueCar said, third-highest among the 10 largest manufacturers.
Winning streak
Fiat Chrysler Automobiles is expected to post a sales gain roughly in line with the industry average, extending its growth streak to 59 months. However, it could be the company’s smallest increase in more than a year.
General Motors and Ford Motor Co. are forecast to post below-average increases, and each is expected to lose up to a half-point of market share.
LMC said compact utility vehicles should be the industry’s biggest retail-sales segment for a fifth straight month, followed by compact cars, midsize utilities and midsize cars. Including fleet, KBB projects that full-size pickups, compact utilities and midsize utilities will each post gains of about 11 percent from a year ago.
“With gas prices rising 30 cents in February, Kelley Blue Book anticipates more consumers to shift toward brands like Toyota and their lineup of fuel-efficient cars and small utilities like its RAV4,” KBB analyst Tim Fleming said today in a statement. “Similar to Toyota, American Honda will have a great month … . Large gains should be seen in the small CR-V utility vehicle, which has been Honda’s best seller during the past four months.”
Total sales for the month are expected to be about 1.3 million vehicles, which would be the fourth-best February on record, behind only 2000 through 2002. This month has the same number of selling days, 24, as February 2014.
Blizzard conditions
But dealers in New England have had a very different experience, with one snowstorm after another burying their inventory and emptying their showrooms. Boston has had more than 100 inches of snow this winter, nearly two-thirds of it in February. A blizzard brought two feet of snow over Presidents Day weekend, decimating sales during what is usually a very busy period.
Colonial Volkswagen in Medford, Mass., sold only 37 cars by the end of last week, vs. about 120 in a normal February, The Boston Globe reported.
“Literally, there’s nobody,” the general manager, Ken Cataldo, told the Globe. “I’ve never seen anything like it. This has been the worst two weeks of my life.”
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