Although auto sales usually remain low in January, extremely cold weather further dampened the U.S. auto sales in Jan, 2014. Sales during the month declined 3% from the year-ago level to 1.01 million. Sales on a seasonally adjusted annualized rate (SAAR) basis remained in line with the year-ago level of 15.2 million units in Jan, 2014.
Most large automakers like Ford Motor Co. (F - Analyst Report), Honda Motor Co., Ltd. (HMC - Analyst Report), General Motors Company (GM - Analyst Report) and Toyota Motor Corp. (TM - Analyst Report) witnessed a year-on-year dip. However, Chrysler and Nissan Motor Co. Ltd. (NSANY) reported increase in sales in Jan, 2014. Nissan led in terms of year-over-year increase in sales, while General Motors witnessed the maximum slump.
Let's look at the U.S. sales figures reported by the individual automakers.
General Motors recorded 171,486 vehicle sales in January, declining 12% year over year. Retail sales decreased 10%, while fleet sales declined 18%. The company is set to launch many vehicles in 2014, including the Chevrolet City Express small van, the Chevrolet Colorado, the GMC Canyon, the revamped Cadillac Escalade and the ELR. These additions are likely to improve sales in the coming months.
Ford reported a 7% decline in total sales from the year-ago period, to 154,644 vehicles in Jan, 2014. Retail sales fell 5% year over year to 113,721 units. Fleet sales plunged 15% as the company faced problems in delivering vehicles on time due to bad weather.
Chrysler Group – controlled by Italy’s Fiat S.p.A – recorded an 8% year-over-year rise in sales, bringing the figure to 127,183 vehicles. Chrysler witnessed year-over-year increase in monthly sales for 46 consecutive months. Moreover, this is the best January sales for the group since 2008.
Toyota’s sales declined 7.2% year over year on both volume and daily selling rate (DSR) basis to 146,365 units in Jan, 2014. Sales in the Toyota division deteriorated 9% based on both volume and DSR to 128,728 units. However, Lexus sales rose 8.8% on both DSR and volume basis to 17,637 units.
Honda recorded a 2.1% year-over-year decrease in sales on DSR and volume basis to 91,631 vehicles in Jan, 2014. Decline in sales in the Honda Division offset the 14.1% surge in sales of the Acura Division.
Nissan Motor posted an 11.8% year-over-year increase in sales to 90,470 vehicles in January. Sales in the Nissan division also climbed 10.4% to 81,472 units. Even the sales of the Infiniti Division hiked 26.3% to 8,998 units in the month.
The cold weather in December became worse in January, leading to another weak month for the U.S. auto sales. As a result, sales are expected to be strong in February, provided weather conditions improve.
Further, the outlook for 2014 appears strong. In the long term, sales are expected to rise on the back of strong pent-up demand, easier car financing and low gas prices. Additionally, improving macroeconomic conditions such as low interest rates, reduced unemployment rates and recovery of the housing market are likely to boost sales. These catalysts are expected to drive the U.S. auto sales to pre-recession levels.
As the automobile sector is a key industry for growth, improving auto sales will help the revival of the overall U.S. economy. Ford expects the U.S. industry volume to range between 16–17 million units in 2014, compared with 15.6 million units sold in 2013. Meanwhile, GM expects industry sales in the range of 16–16.5 million in 2014.