Auto Industry Reports Strong February Sales
February was one of the strongest months in the past year for auto purchases as renewed consumer confidence sent shoppers to car lots, the Los Angeles Times reported.
With most major carmakers reporting Tuesday, February U.S. sales were up more than 20% overall compared with the same month a year earlier to about 1 million vehicles, according to industry estimates.
“The consumer is back to the showrooms,” said Brian Johnson, an analyst with Barclays Capital.
Certainly that was the case for General Motors Co., which on Tuesday said its February U.S. sales rose 45.8% compared with a year earlier to 207,028 vehicles.
The automaker said its retail sales grew by 70% over February 2010 and that its sales to car rental companies and commercial users were about even with the same period a year earlier. The gain in the retail market was the highest year-over-year jump in GM’s history.
“Our plan was to get off to a quick start this year and we did just that,” said Don Johnson, GM’s sales chief. “Having the right vehicles in inventory, combined with aggressive advertising and targeted consumer marketing has been the key to our success in the first two months of this year.”
GM’s robust numbers were helped by “very large incentives offered by the manufacturer for the second month in a row,” Johnson, the Barclays Capital analyst, wrote in a report to investors.
But the analyst said the deals offered by GM don’t signal an outbreak of a broader price war that could kill off industry profits. Johnson noted that GM was “tactically” offering higher incentives while the automaker’s management had recently “reiterated its commitment to keep its incentives in line with the industry for the year.”
In fact, the industry average for incentives was the lowest for a February since 2007, said Jesse Toprak, an analyst at TrueCar.com.
Ford Motor Co. said its total February sales rose 14% compared with the same month a year earlier to 156,626.
Retail sales of Ford’s small cars — Fiesta and Focus — were more than double year-ago levels, which the automaker said could be a result of rising gas prices.
Nissan North America, Inc. said its sales rose 31.6% in February to 92,370 vehicles. The figure set a Nissan record for February U.S. sales.
Toyota Motor Corp. said its February sales rose 41.8 percent41.8% to 141,846 vehicles. Johnson of Barclays Capital cautioned that the gain was deceptive, “the result of a very easy comparison versus last year, when its sales suffered from safety concerns.”
Toyota has issued more than 13 million product recalls since September 2009 in the U.S. alone, including the recall of more than 2 million vehicles to correct problems with floor mats and other issues that could cause unintended acceleration. Toyota briefly stopped selling many of its popular models a year ago to fix sudden acceleration problems.
Still Toyota officials were pleased with the result.
“After two months of improving sales, we feel good about the way 2011 has started,” said Bob Carter, a Toyota vice president.
Chrysler Group said its February sales rose 13% to 95,102 vehicles.
Analysts noted that it was a strong month overall for retail car sales.
“Consumers hit the showrooms during the Presidents Day weekend at a rate that well outperformed February of 2010,” said Jeff Schuster, executive director of global forecasting at J.D. Power & Associates. “The strong retail performance is pushing the (annual) retail selling rate to a level that is approaching 11 million units.”
After suffering through nearly two years of historically low sales, auto dealers were happy to see the flood of customers.
“We are trending to do 140% over February 2010. It is nice to see sales come back,” said Beau Boeckmann, vice president of Los Angeles-area dealer Galpin Ford, the nation’s largest Ford dealership.
“Our biggest hits right now are the Edge crossover and the Fusion sedan and the hybrid. The new Fiesta and the new Explorer are also doing extremely well,” he said.
Schuster estimated that, including fleet sales, automakers were at an annual rate of about 12.6 million vehicles. GM estimates the number to be as many as 13 million vehicles. Most automakers are forecasting total sales of about 13 million, up from 11.6 million last year.