Market gets February bounce after January lull; SAAR tops 16 million

The U.S. light-vehicle market bounced back in February from a January lull as U.S. consumers took advantage of bigger discounts, improving inventories and selection, and milder weather.

New car and light-truck deliveries rose 9.2 percent to 1.3 million in February from a year earlier, with the daily selling rate rising to 50,000 from 42,400 in January, GlobalData said in a preliminary report. It was the 19th consecutive month sales rose year over year.

The U.S. new-vehicle market was expected to grow 5.6 to 6.3 percent in February, based on forecasts from J.D. Power, GlobalData, Cox Automotive and S&P Global Mobility.

The seasonally adjusted annualized rate of sales tallied 16 million, Motor Intelligence said, well above the range of forecasts of 15.4 million to 15.5 million, and above February 2023's 15 million sales pace and January's 15.1 million rate. February marked the fourth month in the last year that the SAAR has topped 16 million.

David Oakley, manager of sales forecasting in the Americas for GlobalData, said the rebalancing of supply and demand is prompting some automakers to boost fleet volumes, with shipments to commercial customers and daily rental operators higher in February than in recent years. Fleet sales totaled an estimated 257,000 last month, GlobalData said, or 20.6 percent of the market.

A sharp rebound in inventory and surge in hybrid demand drove double-digit gains in February sales at Toyota Motor Corp. and Honda Motor Co., while strong hybrid, EV and utility vehicle demand helped Ford Motor Co. deliveries rise 11 percent.

Sales last month rose 16 percent at Toyota Motor Corp. and 32 percent at Honda, the companies said Friday, marking a comeback from a year earlier when stockpiles at both Japanese automakers were still depressed as a result of chip shortages and other supply and shipping bottlenecks.

Toyota reported sales of 184,450 last month, with deliveries of electrified vehicles jumping 84 percent to 68,445. Volume rose 16 percent at the Toyota division and 17 percent at Lexus.

Sales of the redesigned Prius hybrid, which just launched a year ago, rose 363 percent, and RAV4 hybrid deliveries jumped 236 percent to 20,513.

Overall, all but one of the Toyota brand's biggest sellers posted gains last month: RAV4, up 44 percent; Camry, up 7 percent; Corolla, up 22 percent; Tundra, up 9 percent, and Tacoma, down 70 percent. Combined sales of the Highlander and new Grand Highlander crossovers totaled 18,969.

Toyota Motor said it ended February with 229,566 vehicles in U.S. inventory, or a 31-day supply, with 127,385 cars and light trucks in dealer stock and 102,181 at ports or in transit to stores. A year ago, the company's U.S. stockpiles stood at 134,361 light vehicles.

Ford said volume rose 9.6 percent at the Ford brand and 38 percent at Lincoln, with companywide sales of utility vehicle sales up 24 percent and hybrid deliveries advancing 32 percent. Ford was the industry's top-selling brand in February for the second straight month, ahead of Toyota, the company said.

While F series volume dropped 5.8 percent, the Ford division's other top sellers posted big gains: Maverick, up 73 percent; Bronco Sport, up 20 percent; Escape, up 105 percent. At Lincoln, the Corsair and Nautilus each racked up double-digit gains.

The hybrid variant of the Maverick compact pickup set a monthly sales record of 6,463, accounting for more than half of Ford’s hybrid total. Sales of the Escape hybrid crossover jumped 35 percent from January, and Ford noted the first batch of Nautilus hybrid crossovers – added to the lineup as part of the 2024 redesign – went on sale last month.

CEO Jim Farley has said the company plans to quadruple hybrid sales over the next five years, leaning more into the technology as demand for EVs slows. While Ford is discontinuing Explorer and Aviator crossover hybrids for retail buyers because of low demand, the automaker expects to double the mix of F-150 hybrids for the 2024 model year and executives have said it could become the nation’s best-selling hybrid.

At Honda Motor, where sales tallied 110,110 last month, Honda division sales rose 38 percent, offsetting a 6.1 percent decline at Acura. Honda brand U.S. sales have now increased 12 straight months while Acura deliveries have dropped two consecutive months.

Volume surged for all of Honda's top sellers: Accord, up 23 percent; Civic, up 37 percent; CR-V, up 99 percent; HR-V, up 45 percent; and Pilot, up 33 percent.

Honda said its EV sales set a February record of 20,681. Honda brand inventories have more than tripled year over year and stood at 108,400 at the close of February, up from 91,200 at end of January and 32,900 at the close of February 2023.

U.S. sales set a February record at Hyundai behind higher retail and fleet demand but fell for the third straight month at Kia, with both Hyundai Motor Group brands posting sharply higher deliveries of EVs.

Hyundai volume rebounded 6 percent to 60,341 last month after falling 8.6 percent in January while Kia's February deliveries slipped 2.9 percent to 59,059 mostly on weaker midsize car volume.

Retail sales rose to a record 55,341, up 5 percent, in February, Hyundai said, with EV, hybrid and plug-in hybrid volume increasing 7 percent. Fleet shipments totaled just over 5,000, or 8.3 percent of February volume, the company said.

Hyundai's top-selling crossovers, supported by sales promotions and deals, all had a big month: Sales of the Palisade, Santa Fe and Kona each rose 16 percent; and Tucson volume jumped 14 percent. Last month, Hyundai offered 0 percent financing for up to 36 months or up to $1,500 off the 2024 Tucson for eligible buyers.

Sales of the new EV9 three-row crossover tallied 1,318 last month, driving Kia’s overall EV sales up 65 percent.

Combined sales of Kia’s crossovers rose 6 percent last month, but lower Soul volume, the discontinued Rio and a 55 percent decline in K5 sedan sales were an overall drag on the company's February deliveries.

Subaru reported a 3.1 percent hike in deliveries to 47,189 vehicles during the month, led by a 48 percent surge in Forester crossover sales. The only other Subaru nameplate with a gain during the month was the Outback crossover with a 14 percent boost.

Volume rose 6.7 percent to a February record of 32,705 at Mazda and the brand's fourth straight monthly gain.

Volvo snapped a streak of nine straight monthly sales increases with a 7.5 percent drop in February volume.

Genesis posted its 16th consecutive gain in monthly sales, with February deliveries increasing 9 percent to 4,605.

Most other automakers disclose U.S. sales quarterly.

While inventory and selection continue to improve, affordability and higher interest rates remain a drag on more robust market growth, analysts say. After jumping 13 percent to 15.6 million in 2023, U.S. sales are projected by analysts and economists to rise to 15.7 million to 16.1 million in 2024. 

J.D. Power and GlobalData expected retail inventory levels to finish February at around 1.7 million, a 3.6 percent increase from the previous month and a 45 percent jump from February 2023. Toyota, Honda, Lexus, Land Rover, Kia, Cadillac, BMW, Porsche and Chevrolet had the lowest days' supply of new vehicles last month, Cox Automotive data showed, while Dodge, Chrysler, Ram, Jeep, Lincoln, Genesis, Infiniti and Nissan had the highest.

Automakers and dealers continue to hike discounts as inventories rebound and to help mitigate higher interest rates and new-vehicle prices.

J.D. Power and GlobalData said manufacturer discounts in February were expected to rise $66 from January and $1,101, or 75 percent, from February 2023 to $2,565 last month.

"One of the drivers of higher incentive spending is the increased availability of lease deals, and leasing is growing accordingly," said Thomas King, president of the data and analytics division at J.D. Power. He said leasing was on pace to account for 23.2 percent of retail sales in February, up 4.5 percentage points from February 2023.

• There were 25 selling days last month vs. 24 in February 2023.
• The average new-vehicle retail transaction price in February is expected to reach $44,045, down $1,919 from February 2023 and $3,284 from the high of $47,329 in December 2022, J.D. Power and GlobalData said.
• The average incentive per light truck in February was expected to tally $2,722, up $1,221 from a year earlier, J.D. Power and GlobalData said, while the average discount spending per car was expected to total $1,944, up $633 from February 2023.

Michael Martinez contributed to this report.