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Customer LoginsSame-Day Analysis: US light-vehicle sales grow 6.9% February, best monthly SAAR in 15 years
February's US light-vehicle sales delivered the strongest seasonally adjusted annual rate (SAAR) for the month in 15 years, at 17.43-million units. February returned a sales gain of 6.9% year on year (y/y), lifting the year-to-date sales figure up by 3.5% y/y.
IHS Automotive Perspective
- Significance: February's US light-vehicle sales gained 6.7%, with the same number of selling days as the year before. The seasonally adjusted annualised rate (SAAR) in February was not notably higher than in January.
- Implications: Conditions are strong for another record sales year, with February's SAAR the best in 15 years and showing a gain over the same month of 2015, unlike January's decline.
- Outlook: The February light-vehicle sales SAAR of 17.43 million units moved sideways from January's 17.45 million units, less than was hoped for. It also represented the highest level for the month in 15 years. Although the auto purchase environment remains favourable, the stock-market volatility early in the month may have created some jittery consumers. The fundamentals that have supported light-vehicle demand - low fuel prices, available credit, and expanding employment and housing markets - remain and with the modest January and February results resulting in growing inventory levels, we expect some strong March results to close the first quarter. IHS maintains its full-year US sales projection of 17.8 million units.
US light-vehicle sales increased by 6.9% year on year (y/y) in February, with the same number of selling days as in the year before. The seasonally adjusted annualised rate (SAAR) in February was 17.43 million units, similar to January's 17.45 million units, but less than was hoped for. February's SAAR also represented the highest level for the month in 15 years.
Detroit automakers
General Motors' (GM) reduction of fleet sales in 2015 will carry on at an accelerated pace in 2016, with a target to reduce rental car sales in 2016 by another 100,000 units and a fleet mix target of about 20% throughout 2016, according to the president of GM North America, Alan Batey. GM cut rental car sales back by 16,500 units in February. The company is also expecting to operate with about 70 days' supply in most months of 2016, and February's month-end inventory stood at 67 days. In February, sales were down 1.5%, though GM says retail sales grew 7% for the month. Buick saw 2.3% y/y sales growth, with sales of the Enclave and the Encore growing and the Cascada's continued rolling out. Cadillac saw sales growth for the Escalade, CTS, and SRX (it being sold down ahead the arrival of XT5), and reported sales up by 0.9% y/y. While GM reported a gain in Chevrolet's retail performance of 13.0%, a drop in rental fleet sales pulled total sales down 0.7% in February. High-margin GMC sales declined 6.8% in February, impacted by sales declines for the Terrain, Acadia, and Canyon.
Ford Motor Company saw a sales decline in the first month of 2016, and came roaring back with a 20.4% gain in February. The Ford brand gained 20.1% y/y in February and is up 8.6% in the year to date (ytd). Lincoln sales jumped 30.4% for the month and 19.0% for the ytd. Company-wide, car sales gained 18.8% while utilities gained 29.2% and trucks 14.8%. Lincoln's improvement was largely on the MKX, though all Lincoln makes gained compared with sales in February 2015. The Ford C-MAX was the only Ford car to show a sales decline in February and the E-Series the only truck.
Fiat Chrysler Automobiles (FCA) US reported its 71st consecutive month of y/y sales gains, increasing 11.8% y/y. FCA reports selling 149,188 truck and utilities, compared with 33,691 cars in February, with car sales down 26.5% and trucks and utilities up 26.7%. As the company has announced its intention to drop the Chrysler 200 (down 58.3% in February) and Dodge Dart (down 8.6%), FCA's reliance on trucks and sport utility vehicles (SUVs) will likely intensify. Ram pick-up demand gained 23.2% in February. Fiat brand sales dropped 9.0% for the month, as sales of the 500 and 500L combined declined 56% y/y. Jeep accounted for 45.7% of FCA's US February truck sales and 37.3% of overall sales, with a 22.6% y/y increase, assisted by the Renegade. Dodge brand sales were up 12.2% in February, on the Caravan and Durango. Sales of FCA minivans combined grew nearly 50%.
Japanese automakers
Toyota was among the companies with a y/y increase in February, up 5.2%, with a 5.8% gain for the Toyota brand and 1.0% for the Lexus brand. Toyota division car sales picked up by 1.2%, though the Camry, Prius, and Avalon saw declines. Toyota division trucks gained 10.0%, though SUV sales were up 11.1 and trucks 4.9%. At Lexus, car sales dropped 15.4% and truck sales gained 18.7%. The NX continues to perform well, and the all-new RX showed sales improvement as well.
Nissan Group sales picked up 10.5% y/y in February, with the Nissan division's sales up 12.9% and Infiniti's down 11.0%. Nissan is ahead of Honda so far in 2016. Nissan division car and truck sales were up (11.9% and 14.2%, respectively). Infiniti's QX50 showed a strong sales gain, though the Q50 saw a sales decline; those two products make up 59% of Infiniti's sales.
American Honda sales grew 12.8% y/y in February. Honda division sales were up 14.9% at 106,212 units, while Acura sales declined 1.7% to 12,773 units. Honda's car line outperformed SUVs in February, up 17.6% compared with 11.8% y/y. The all-new Civic's sales were up 32% and it was the brand's best-seller in February. CR-V demand picked up 13.2%, not enough to recapture its lead over the Civic. Acura, which gained 63% of its sales from the MDX and RDX, suffered a 3.9% decline in SUV sales and a 2.3% gain in car sales.
Subaru claimed another record sales month in February, the 51st consecutive month of y/y growth, up 2%. Though the company's recent years of double-digit growth rates are being challenged by other automakers, Subaru has outsold Volkswagen (VW) Group so far in 2016. Mazda reported a decrease of 16.0% y/y in its February sales, impacted by having dropped the Mazda5 and Mazda2, as well as declines in sales of the Mazda6 and Mazda3. Additionally, the CX-9 is in sell-down ahead of the new-generation model's arrival.
Other automakers
Volkswagen Group saw US sales contract 7.1% in February, which the VW brand blamed on a "seasonal fleet sales" instead of lost diesel-powered volume, with VW brand sales dropping 13.2%. Audi reported its 62nd straight month of sales growth, up 2.3%, and Porsche's sales gained 11.2%. Combined February sales for Hyundai (53,009 units) and affiliate Kia (49,737 units) reflected a
Outlook and implications
While the industry was hoping for an increase from the January 2016 SAAR reading of 17.45 million units, February's US light-vehicle sales SAAR of 17.43 million units moved sideways. However, it also represented the highest level for the month in 15 years. Although the auto purchase environment remains favourable, the stock market volatility early in the month may have created some jittery consumers. The fundamentals that have supported light vehicle demand - low fuel prices, available credit, and expanding employment and housing markets - remain and with the modest January and February results resulting in growing inventory levels, we expect some strong March results to close the first quarter. IHS maintains its full-year sales projection of 17.8 million units.
There were 24 selling days this February, the same number of selling day as last year. On a unit volume level, 1.34 million light vehicles were sold, up 6.7% y/y, leaving the sales volume from the first two months of 2016 up by over 79,400 units on the corresponding months of 2015.
Most of the automakers posted year-on-year sales increases, led by a 20.2% improvement by Ford. FCA (up 11.8%), Honda (up 12.8%), and Nissan (up 10.5%) also realised double-digit sales growth rates for the month. With its recently stated focus on retail sales and managing inventory, GM posted a 1.5% sales decline for the month, which translated to an overall market share of 17.0%, its lowest monthly reading since March 2015. VW Group reported a 7.1% decline, easily the worst performance. Subaru has overtaken VW in the sales race in 2016.
Light truck sales continue to dominate the demand conversation. Total light-vehicle sales in February were motivated by a 12.5% increase in light truck demand, while passenger car sales were down 0.6%. Through the first two months of 2016, passenger car sales were over 47,000 units lower than in the same period last year. Light truck sales accounted for 58.5% of light-vehicle demand for the month, compared with the 55.5% share in February 2015. With fuel prices expected to sustain their moderate level in the short-term forecast horizon, sales momentum within the light truck sector should continue throughout 2016.
With the moderate sales growth paces in January and February, month-end vehicle stocks continue to grow, setting up expectations for some March clearance activity. Month-end inventory in the US for Ford was 759,000 units, up 39,000 units over January 2015, with stock split between 217,000 cars and 542,000 light trucks. At GM, inventory ended the month at 640,722 units (up 10,844 units), while FCA's stock stood at 673,494 units, up 6,842 units from the end of January.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.