February U.S. auto sales: SUV, crossover demand softens blow

Americans' demand for larger, high-riding crossovers and SUVs gave automakers a ray of sunshine amid an otherwise dismal February sales month. The industrywide inventory crunch caused by the ongoing semiconductor chip shortage continues to take a toll on retail sales.

February auto sales hovered just above 1 million cars and light trucks, representing a drop of 12.4 percent compared with the same period in 2021, according to data from Motor Intelligence. More than half of overall February sales were crossovers and SUVs.

Of the seven automakers that report monthly sales, only Mazda North America and the three Korean brands logged increases, according to the Automotive News Research & Data Center. Hyundai brand sales were boosted in part by its robust lineup of crossovers and SUVs — all of which recorded double-digit gains. Kia America's SUV offerings also garnered strong February results.

January and February are historically slower months for vehicle sales as consumers retreat from winter weather and recover from holiday spending. But the current market is being further challenged by record-low consumer sentiment because of "inflationary declines in personal finance," according to a survey conducted by the University of Michigan. That mood, coupled with inventory constraints, contributed to the weak February sales.

The seasonally adjusted annual rate, or SAAR, also declined — to 14.2 million sales from 15.2 million in January — according to data from Motor Intelligence.

Sales typically drop from January to February, but "even the slightest sales decrease can make a difference" in the SAAR, said Jessica Caldwell, executive director of insights for industry research firm Edmunds.

Edmunds forecasts that the industry will end the year at 15.2 million sales.

Caldwell also said that because inventory remains so low for automakers, the industry's road to recovery faces many ups and downs.

"There's so much going on at the factories in terms of logistics, all the automakers will recover on different paths," she said. "The persistent inventory issues are concerning, but we have hit the bottom.

"It's going to get better — just not right away," Caldwell predicted.

But the lower SAAR is still higher than the rates during the last five months of 2021, signaling the industry is on the mend.

March will be a key indicator of recovery as the weather improves and consumers recuperate from their seasonal spending hangover.

The Japanese fiscal year also ends in March, a milestone that typically sees more incentives placed on brands such as Nissan and Toyota, Caldwell said.

But despite tight inventories and all the other factors, consumer demand remains strong, as evidenced by rising transaction prices. Edmunds found that, on average, consumers were paying $728 above sticker. That number is expected to inch closer to $1,000 in February.

Hyundai achieved record February results, and for the second month in a row the automaker did not have any fleet sales, the company said. The recently redesigned Hyundai Tucson notched nearly 13,000 sales, a 37 percent increase over the prior year. Sales of the three-row Palisade were up nearly 17 percent, and the subcompact Venue saw a 16 percent increase. The Ioniq 5 electric crossover posted 2,555 sales and the new Santa Cruz pickup recorded 2,630 sales.

Hyundai's U.S. sales chief Randy Parker said the automaker has experienced no factory downtime and is working closely with dealers to manage consumer demand.

"Dealers are being very efficient by selling inbound inventory and what they have in stock," Parker said, noting that consumers are aware of tight inventories and are willing to wait for the vehicle they want.

Parker said Hyundai ended the month with 19,000 vehicles in dealer stock and that the company expects to sell between 50,000 and 60,000 vehicles in March.

Genesis, the luxury arm of Hyundai, continues to gain momentum with its new GV70 luxury compact crossover. The brand posted its best-ever February, with 3,482 sales across its five-vehicle lineup.

In other notable February developments across the industry:

• Mazda chalked up an 8 percent sales increase, led by the strength of its CX-5 and CX-9 crossovers, which both recorded record February gains.
• Ford Motor Co. sales slid almost 21 percent, but the Bronco Sport posted an 86 percent increase, with sales cresting 10,000. Sales of the Edge rose 8 percent, and the new Bronco logged 5,715 sales.
• Ford's new subcompact Maverick pickup, which rivals the Hyundai Santa Cruz, captured more than 4,000 sales. The Lincoln Aviator and Corsair crossovers also had increases.
• American Honda saw its seventh-straight double-digit monthly decline in February. The company cited supply issues and the impact of Winter Storm Landon — which brought snow and freezing rain to a broad region spanning Colorado, New Mexico and the Great Lakes — as the major source of sales disruption.
• Honda's HR-V subcompact crossover notched its 13th monthly record, increasing 63 percent to 13,340 sales.

Sales at Toyota Motor North America declined 11 percent, but the Toyota brand's three-row Highlander experienced more than a 20 percent gain, with sales topping 22,949. Interest in the new-generation Tundra full-size pickup increased, with sales rising 16 percent to 6,731.

• Lexus Division's RX crossover logged a 14 percent increase.
• Subaru of America was down 7 percent, but sales of its Crosstrek rose 35 percent to 14,476. The three-row Ascent was up 12 percent.
• Volvo Car USA experienced a February slide of 32 percent, and none of its vehicles recorded gains. The company said its Recharge EV and PHEV models accounted for 27 percent of the brand's total sales.