By March 1, 2016 Read More →

Low gas prices help automakers post big sales gains in February

Low gas prices, low interest rates outweigh stock market volatility in buyers’ minds

Low gas prices

Low gas prices helped automakers post US sales gains in February.  Shell photo.

DETROIT _ Automakers posted big U.S. sales gains in February as consumers returned to showrooms after a snowy January.

Ford’s sales rose 20 per cent over last February, boosted in part by higher sales to rental car fleets. Honda’s sales were up 13 per cent and Fiat Chrysler’s rose 12 per cent. Nissan’s sales rose nearly 11 per cent and Toyota’s were up 5 per cent.

General Motors said its sales fell 1.5 per cent, partly due to a 39-per cent cut in rental sales. Volkswagen, still stinging from its diesel cheating scandal, saw its U.S. sales drop 13 per cent.

Industry analysts had expected February sales to bounce back after a slight decline in January. Consulting firm LMC Automotive consulting firm predicts an 8.1 per cent increase over a year ago to 1.36 million new vehicles. With an annual selling rate of 17.7 million cars and trucks, last month would be the best February in 16 years.

Automakers reported monthly sales figures on Tuesday.

Ford Chief Economist Emily Kolinski Morris said improving job and income growth, as well as low gas prices and low interest rates, are outweighing stock market volatility in consumers’ minds. Buyers are confident, which is key for auto sales.

Proof of that confidence is everywhere. Sales of the Cadillac Escalade, an SUV that starts at $73,000, were up 22 per cent over last February. Sales of Nissan’s $30,000 Murano SUV nearly doubled; so did sales of the $89,000 Lexus LX SUV. Ford said it was the best February for van sales since 1979.

LMC is predicting sales of 17.8 million new vehicles this year, up from 17.46 million last year. But the growth rate is slowing from previous years and many are expecting a plateau as U.S. demand peaks.

GM said its Chevrolet and GMC brands saw declines in February but sales improved at Cadillac and Buick. GM’s bestseller, the Chevrolet Silverado pickup, saw a 5-per cent sales decline. GM sold 227,825 cars and trucks last month.

GM said it’s trying to lower its reliance on rental sales, which are less profitable and can hurt vehicle resale values. The company said its sales to commercial and government fleets are up so far this year, but it has sold 30,000 fewer vehicles to rental fleets. Around 21 per cent of the company’s February sales went to fleets rather than individual buyers.

It was a different story at Ford. Ford’s U.S. sales chief Mark LaNeve said Ford expects heavier fleet sales in the first four months of this year before they taper off. Thirty-six per cent of Ford’s U.S. sales went to fleets in February.

LaNeve defended that percentage, which is unusually high. At Toyota, for example, 16.5 per cent of February sales went to fleets.

“We like this business. It’s profitable for us and we manage it very well,” he said.

Ford’s luxury Lincoln brand saw sales jump 30 per cent after sales of its new MKX SUV more than doubled over last February. Sales of Ford’s bestseller, the F-Series pickup, were up 10 per cent. Ford sold 217,192 vehicles.

Toyota’s car sales dropped slightly, the victim of lower gas prices. Sales of the Prius hybrid were down 12 per cent. But the company’s truck and SUV sales rose 11 per cent, partly due to strong sales of its luxury Lexus SUVs. Totota sold 189,852 vehicles last month.

Fiat Chrysler was led by the Jeep brand and the Ram pickup. Both reported sales increases of 23 per cent. The company’s truck sales rose 27 per cent, but its car sales fell by the same percentage. Fiat Chrysler sold 149,188 trucks and SUVs last month but only 33,691 cars.

Honda bucked the industry with strong car sales. Sales of the Accord midsize sedan were up 20 per cent, which helped make up for weaker sales at Honda’s luxury Acura division. Honda sold 118,985 vehicles.

At Nissan, car sales were up nearly 8 per cent while truck and SUV sales rose 15 per cent. Overall, the Nissan and Infiniti brands sold nearly 131,000 vehicles.

Volkswagen had a few winners. Sales of the Tiguan SUV were up 78 per cent, while the German company’s electric Golf also saw higher sales. But the brand’s sales will likely continue to fall until it announces a fix for diesels that cheated on U.S. emissions standards. Volkswagen’s U.S. sales totalled 22,231 in February.

The Canadian Press.

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