U.S. Auto Sales Mixed in February
March 01 2017 - 9:37AM
Dow Jones News
By Adrienne Roberts and Anne Steele
The Big Three posted mixed U.S. auto sales results for February
in what is expected to be a flat month from a year ago amid waning
demand.
General Motors Co., the No. 1 U.S. auto maker, logged a 4.2%
rise in sales to 237,388 vehicles. Retail sales climbed 5% to
188,715, while fleet sales were up 2%.
Ford Motor Co., meanwhile, booked sales of 207,464, a 4% decline
from last year. Retail sales fell 3% to 134,576, and fleet sales
were 5% lower. The Detroit auto maker said car sales dropped 24%
amid a customer shift toward larger vehicles, and Ford brand SUVs
hit a record for the month.
Fiat Chrysler Automobiles NV's sales fell 10% to 168,326, with a
26% drop in fleet sales and a 3% decline in retail sales.
Analysts expect U.S. light-vehicle sales in February to be
relatively flat compared with the same period a year ago. To keep
metal moving, auto makers offered record incentives and sold more
vehicles to fleet buyers, according to J.D. Power estimates.
Sales to fleet buyers -- including rental-car agencies and
businesses -- are expected to total 316,700 vehicles in February,
according to J.D. Power, up 1.4% from the same month last year.
Fleet sales are a way for auto makers to move vehicles, but they
typically offer slimmer margins compared with sales at retail
stores.
Retail sales are seen remaining flat compared with last
February, the firm said.
Analysts expect 1.3 million to 1.35 million vehicles sold in
February, equaling a seasonally adjusted annual sales rate in the
range of 17.1 million to 17.7 million. That compares with 17.6
million SAAR in February 2016 and a 17.5 million SAAR in January,
both of which were considered historically strong.
"We expect February to eke out a small increase over last year,
despite bad weather giving a slow start to the month," said Deirdre
Borrego, senior vice president of J.D. Power's automotive data and
analytics.
Ms. Borrego said the results were partially driven by elevated
levels of incentives, which "remain a fundamental threat to the
long-term health of the industry."
Presidents Day weekend discounts helped to boost February's
sales by an estimated 20% compared with an average weekend in
February, according to Edmunds.com.
Despite record high inventories on dealer lots at the end of
January, manufacturers are maintaining strong production plans,
suggesting they will have to continue to offer steep incentives to
keep up with a decline in demand, according to WardsAuto.com.
"Inventory is starting to swell, which is concerning considering
that we're still months away from the peak summer selling season,"
Edmunds analyst Jessica Caldwell said. "The auto makers are in a
tricky spot: Aggressive incentives are already starting to eat into
profits and residuals, but it takes discipline to pull back the
production reins in what's still a fairly strong market."
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
March 01, 2017 10:22 ET (15:22 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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