Nissan, Toyota, Fiat Chrysler and Honda all reported sales declines in February as a combination of wintry weather and rising costs under cut the sales of new vehicles.
Trucks and sport-utility vehicles continued to dominate the sales picture, but Nissan and Toyota also reported an uptick in sales of subcompact and compact cars in what is perhaps a sign that consumers are beginning to look for less expensive transportation alternatives in the face of rising prices and interest rates.
Strong sales of trucks and SUVs would likely be good news for General Motors and Ford, but the two automakers do not report sales on a monthly basis.
Following 11 straight months of year-over-year sales increases, FCA reported overall U.S. February sales retreated 2% to 162,036 vehicles in a soft market, compared with sales of 165,903 vehicles in February 2018. The Jeep brand is returning to a more “normal” sales cadence after benefiting from both the new and old Wrangler coming off the production lines this time last year.
(February new vehicle sales expected to drop. Click Here for the story.)
FCA said that sales of the Jeep Grand Cherokee set an all-time February sales record, despite another month of bitter weather across key selling regions for the brand. The Ram brand scored another record month as well, on the back of award-winning products in the hot light-duty and heavy-duty markets.
“The overall industry is starting off slower due in part to weather, the U.S. government shutdown and concern over tax refunds,” U.S. Head of Sales Reid Bigland said.
“We still see a strong, stable economy and anticipate any lost winter sales will be made up in the spring. For us, the Ram brand was the standout in February, and Jeep Cherokee set a February record as well,” Bigland said.
American Honda reported a decline of sales of just under 0.4%. Acura sales climbed 11.1 % but sales of Honda brand vehicles dropped 1.6%. Sales of the Honda CR-V accounted for more than 26,000 of the roughly 116,000 vehicles American Honda sold during February.
“We’re off to a good start in 2019 with notable gains for both cars and light trucks, bolstered by the arrival of our all-new Passport SUV,” said Henio Arcangeli Jr., senior vice president of the American Honda Automobile Division.
Toyota Motor North America reported February 2019 sales of 172,748 vehicles, a decrease of 5.2% from February 2018 on a volume and daily selling rate (DSR) basis.
Toyota division posted February sales of 152,626 units, down 6.3% on a volume and DSR basis.
Lexus posted February sales increase of 4.4% on a volume and a daily selling rate basis, Toyota said.
(Click Here for more about analysts forecasting strong 2019 auto sales.)
Analysts said sales of General Motors Co. and Ford Motor Co., which report sales quarterly also saw their sales drop in February despite the continuing strength of the pick-up truck segment.
“New-vehicle transaction prices climbed nearly 3% in February, led by the strength in full-size pickup trucks,” said Tim Fleming, analyst for Kelley Blue Book. “New pickups from General Motors and Ram are setting the pace for the segment, and every full-size pickup truck had year-over-year growth greater than 4% .
“Looking at midsize trucks, the segment was only up 1% for the month, but it is set for a similar revival with the new Ford Ranger hitting the market right now and the Jeep Gladiator coming soon,” Fleming said.
Analysts for Edmunds noted that interest rates on new vehicles are expected to hit their highest level since 2009 in February.
The annual percentage rate on new financed vehicles averaged 6.26% in February, compared to 5.19% last year and 4.56% five years ago. Edmunds experts attribute this in part to automakers reining in zero-percent financing deals and overall low interest rate offers.
In February, zero-percent finance offers constituted 3.22% of all financed deals compared to 8.28% last year and 6.95% five years ago, and only 18% of shoppers received an APR under 3% in February, compared to 29.91% last year, and 45.49% five years ago.
Edmunds also said the average transaction price of a new vehicle is expected to remain elevated, hitting $36,331 in February.
(Auto sales stabilize in January despite polar weather. Click Here for the story.)
“Shopping conditions are pretty unfavorable for consumers across the board, and even those with good credit are having trouble finding compelling finance offers,” said Jeremy Acevedo, Edmunds’ manager of industry analysis. “As rising vehicle costs and interest rates continue to compromise affordability, more shoppers might find themselves priced out of the new vehicle market.”