By Angelo Young - Click here for the Big 8 U.S. new-auto February 2014 sales blog.
Click here for the Big 8 U.S. new-auto February 2014 forecasting details.
When it comes to U.S. new-auto sales, you might as well treat January and February as one big miss after winter weather hit sales like, well, a polar vortex.
The final tally comes to 1,191,037 unit sales, with the ‘Big 8’ automakers claiming 1.06 million of those sales. Auto pricing information provider Edmunds.com and others had forecast that sales would come in at approximately 1.2 million, so sales were below most expectations, which weren’t high in the first place.
The seasonally adjusted annualized rate, or SAAR, for February is 15.3 million, which is on the low end of the range of estimates from forecasters.
“We’re definitely seeing that there were some declines relative to where we expected to be in February,” said Eric Lyman, vice president of editorial and consulting for automotive data provider ALG, a division of TrueCar, Inc. “With the second month in a row with the polar vortex in play, we are seeing it as having an impact. Certainly other industries and the Fed are looking into the economic impact as a result of the poor weather. So [the weather] hypothesis seems to have gained more traction and legitimacy.”
Testifying before the Senate Banking Committee on Feb. 27 about monetary policy, Federal Reserve Chair Janet Yellen pointed to “unseasonably cold weather” as the root cause for recent declines in employment, retail sales and manufacturing output.
Among the world’s Big 8 automakers, Nissan and Chrysler managed to squeak through an anemic month with double-digit, year-over-year growth. Chrysler was able to do it in part because of Jeep, whose consumers were perhaps encouraged by the weather to buy 4X4s, while Nissan's numerous crossovers showed the strongest growth right now.
“Nissan saw strong growth in February, despite the continued cold weather that has plagued much of the U.S," said Karl Brauer, senior analyst at automotive pricing and information provider Kelley Blue Book. "This is at least partially due to Nissan's strong customer base in the Southern and coastal regions.”
Nissan’s new Rogue crossover and the redesigned Altima sedan, as well as the new Infiniti Q50, all did relatively well last month.
Volkswagen saw the biggest decline among the Big 8 thanks to its exposure to sedans and a Tiguan crossover that is long overdue for a re-fresh in light of the heavy competition in that segment right now.
Pickup truck sales were surprisingly lackluster, too.
“We saw a slight decline in the full-size pickup truck segment last month, a trend that continued into February,” Erich Merkle, Ford’s U.S. sales analyst, said during a conference call on Thursday. “Continuing a theme we've discussed for the past several months, small utilities once again hit record industry volumes."
So what’s in store for March?
ALG’s Lyman said it will take more than a month to get the industry back in line from its current high inventories and growing incentive spending. He said that by April he’ll know if the weather is the main reason for the tepid sales performance in the first two months of the year -- or if there were any other factors at play.
Edmunds.com analyst Jeremy Acevedo is optimistic.
"February played out almost like two different months rolled into one,” he said. “The weather complications in the first half of the month kept shoppers away from showrooms early on, leading to depressed sales in the first half of the month. But Presidents' Day weekend offered a nice shot of momentum to sales that continued through the rest of February as the weather cooperated a little more. It's clear that there continues to be a steady level of shopper demand as we carry on into March.”