The 2016 automotive season is off to the races, ladies and gentlemen.
I hope you are ready because Gas prices are down, manufacturers are raising incentives, and people are buying cars.
If I can do anything to help, let me know –> Call or Text me at 1 513 294-8767
February U.S. sales pace may be highest for month since 2000, analysts say
‘2016 is off to the races’
U.S. gasoline prices have continued falling in February, driving demand for pickups and SUVs higher but forcing automakers to raise incentives on cars to keep inventories from piling up too much.
Photo credit: DAVID PHILLIPS
U.S. auto sales, after being slowed last month by winter storms, are on pace to reach the highest level for any February since 2000, some forecasts released this week show.
Purchases delayed from January and a bevy of Presidents Day deals are likely to push February sales up about 8 percent, according to Edmunds.com and LMC Automotive. That would result in a seasonally adjusted, annualized selling rate of 17.7 million units, up from 17.6 million in January and 16.4 million a year ago.
TrueCar said it expects sales this month to climb 6.6 percent higher than February 2015, with a SAAR of 17.5 million. Kelley Blue Book was more optimistic, projecting a 9 percent gain and a SAAR of 17.9 million.
The February 2000 SAAR came in at 18.9 million.
“Thus far, 2016 is off to the races, with February looking to keep the selling rate in line with expectations,” Jeff Schuster, LMC’s senior vice president of forecasting, said in a statement. “Consumers seem to be shrugging off the volatility in the stock market and higher interest rates. Very low fuel prices and many new vehicles in showrooms should help drive another strong year for auto sales.”
January and February are typically the two weakest months of the year. Since 1989, February sales have been an average of 13 percent better than January, but this year’s forecasts call for a month-over-month increase of about 18 percent. Sales tend to pick up significantly in March as the traditional spring selling season begins.
Analysts continue to expect industry sales in 2016 to beat the record of 17.47 million set last year.
“Demand for new cars and trucks this month looks strong enough to lift new sales in February to the highest level in over 15 years,” Eric Lyman, TrueCar’s vice president of industry insights, said in a statement. “It’s a sign that consumers remain generally confident in the economy and their finances — and are even willing to brave winter weather to buy a new vehicle.”
J.D. Power says cars are expected to account for just 42 percent of U.S. light-vehicle sales in February, the lowest rate ever for the month.
Photo credit: DAVID PHILLIPS
Longer loan terms and leasing
Long loans and leases are expected to account for a record 65.1 percent of all retail sales in February, up from 64.3 percent in January, according to J.D. Power, which works with LMC to forecast sales. It said consumers are on track to spend more than $32 billion on new vehicles this month, a February record and $3 billion more than a year ago.
Gasoline prices have continued falling in February, driving sales of pickups and SUVs higher and forcing automakers to raise incentives on car nameplates to keep inventories from piling up too much.
J.D. Power said cars are expected to account for just 42 percent of sales in the month, the lowest in any February on record. The nationwide average for a gallon of regular gasoline is $1.715 today, according to the AAA motor club, 11.1 cents less than a month ago and 61.3 cents below a year ago.
Overall, incentive spending this month is 11 percent more than in February 2015 but 0.5 percent less than last month, TrueCar said. It said incentives rose 29 percent at General Motors, 22 percent at Volkswagen Group of America and 15 percent at Fiat Chrysler Automobiles but fell at Subaru, Hyundai and American Honda.
TrueCar, KBB and Edmunds are all projecting a double-digit sales increase for Ford Motor Co., whose sales were down in January. The forecasts call for gains of 9 to 11 percent for FCA, 8 to 9 percent at Nissan North America, and 7 to 13 percent for American Honda.
GM, Toyota Motor Sales U.S.A. and Hyundai-Kia are all expected to post below-average increases. TrueCar and Edmunds said VW sales are expected to be down about 2 percent, while KBB projects a 4 percent gain.