Ford Motor Co.’s light vehicle sales soared 20% in February, while Fiat Chrysler Automobiles' deliveries climbed 12%, as both far exceeded analyst estimates, thanks to promotions tied to the Presidents Day holiday and continued strong demand for sport utility vehicles and pickups. Nissan Motor Co. also beat estimates, but General Motors Co. missed.
Ford, projected to report a 13% increase for the month, topped that in all three categories: cars, SUVs and pickups. Fiat Chrysler, projected to report a 9.2% increase, extended its U.S. sales-gain streak to 71 months. Jeep deliveries advanced 23% from a year earlier to 68,228, led by the Cherokee and Grand Cherokee. The SUV brand reported its best February ever, as did the company’s Ram pickups, sales chief Reid Bigland said in the statement.
Automakers and dealerships layered on discounts during the long holiday weekend to catch buyers who might have put off purchases when a January storm dumped two feet of snow on New York and Washington. Nissan Motor Co. also beat estimates with an 11% increase, compared with projections for a 7.2% gain.
“The American consumer is feeling confident and enthusiastic about buying new vehicles, especially sport utilities and trucks,” said Michelle Krebs, an analyst for AutoTrader.com. “February’s strong sales bode well for a good spring selling season.”
Not everyone enjoyed the party. GM sales fell 1.5% to 227,825 vehicles, missing the average estimate for a 5.2% gain. GM said it cut back sales of low-priced cars to rental agencies by 16,500 vehicles, or 39%, while retail sales rose 7%. If GM had matched rental fleet sales from this time last year, its total sales would have been up 7%, said Kurt McNeil, GM’s vice president of U.S. sales.
“We’re still very bullish on the market,” he said in a phone interview. “Jobs data is strong, fuel prices are at historic lows and interest rates are low. We think it could potentially be a record year.”
Ford’s surge was especially strong among sport utility vehicles, with the best February in company history. Sales of the recently redesigned Edge rose 91%, while the Explorer was up 18%. Deliveries of Ford’s F-Series pickup line rose 9.9%. The automaker also had a rare rise in car sales, including a 33% gain in deliveries of the Focus compact, which Ford has said it’s shifting to a factory outside the U.S. because of slow sales.
The average estimate for last month’s annualized selling rate, adjusted for seasonal trends, was 17.6 million vehicles. That would be an increase of 1.2 million from the pace a year earlier and would mark the best February since 2000. Fiat Chrysler projected a 17.9 million rate, including medium and heavy-duty trucks, which typically account for at least 200,000. GM said the light-vehicle rate was probably 17.7 million.
Analysts’ estimates compiled by Bloomberg included increases of 8.8 percent for Honda Motor Co. and 4.9% for Toyota Motor Corp. Volkswagen AG was the only one projected to report a decline, as the automaker continues to face fallout from cheating on government emissions tests.
Auto sales in the U.S.--poised to set a record again this year--continue to provide growth in the uneven economic recovery. Light-vehicle sales are in their seventh year of growth, benefiting from cheap gasoline, available credit and falling unemployment. The U.S. gross domestic product expanded by 1% on an annualized basis, after an initial estimate of only 0.7% growth.
Goldman Sachs estimates incentives industry-wide were up $175 a vehicle in February, according to a note from analyst Patrick Archambault. The increase marks the quiet rise of the Presidents Day long weekend as a major automotive selling event.
Feb. 13, the Saturday of this year’s Presidents Day weekend, set a single-day record with 342,171 billable credit applications, according to Cox Automotive’s Dealertrack network, which accounts for 60% of dealerships nationwide.
“The industry will use any holiday to pick up the megaphone and let people know they have vehicles for sale,” Autotrader’s Krebs said in an interview last week. “We had seen this around Memorial Day and Fourth of July and Labor Day, and Presidents Day has been included in that now.”