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.