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If the forecasts are correct, there will be light vehicle sales of 1,331,787 in the U.S. in February for an estimated Seasonally Adjusted Annual Rate – SAAR – of 17.6 million. This is a 17% increase in sales from January 2017, but a 1% decrease from February 2016. February is historically a slow sales month, except for the President’s Day holiday weekend when auto sales are roughly 20% more than an average February weekend.
“The holiday weekend is likely a contributing factor to strong sales in February, but we’re also seeing signs that automakers are starting to be a bit more aggressive to move cars off the lot,” said Jessica Caldwell, Edmunds executive director for industry analysis. “Fleet sales were robust in February, and incentives are continuing to rise. While trucks and SUVs don’t need as much help to find interested buyers, inventories of passenger cars have been building.”
After a record year of sales in 2016 and seven consecutive year-over-year sales increases, Kelley Blue Book’s forecast for 2017 calls for sales in the range of 16.8 million to 17.3 million units, which represents a -1-4 %decrease from last year. Retail sales are expected to account for 73.9% of volume in February 2017, down from 75.6% in February 2016.
“Subaru of America sales will be lifted by its crossover utility vehicles like the Outback and Forester, as it heads toward another record month,” said Tim Fleming, analyst for Kelley Blue Book. “In addition, the all-new Impreza, which is now on sale, will provide a short-term boost to the automaker, but longer-term prospects for the small car segment remain bleak. Subaru has aggressive growth targets for 2017, but they currently stand in a great position as the brand with the lowest incentive spending and fastest-selling inventory in the industry.
“Fiat Chrysler could see one of the biggest sales declines for the month, with volume dropping most on its car models. Car volume is down largely due to the wind down of the Chrysler 200 and Dodge Dart. Also, after many years of steep growth, the Jeep brand is running into headwinds, although the Renegade small SUV is drawing positive attention. Jeep also will soon benefit from the upcoming second generation Compass, which will replace the aging Compass and Patriot,” predicts Fleming.
Utility segments should top the industry again, with projected growth for the compact and mid-size SUV segments in the 2 to 5% range. The market for SUVs remains strong. Light trucks are expected to make up 63% of sales in February 2017, up from 59% one year ago.
Compact and mid-size cars are expected to fall by double digits. Kelley Blue Book’s overall outlook for compact cars, while not positive, is slightly better than mid-size cars, as they face less competition from SUV segments, which tend to have much higher transaction prices.
