February New Car Sales on Pace for Record

By Paul Ausick Updated Apr 27, 9:13PM EDT · Published Feb 21, 11:20AM EST

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While the weather in much of the country has been weighing down new car sales since the beginning of the year, analysts at J.D. Power and LMC Automotive expect the spell to break in the second half of February and lead to record sales for the month. Light vehicle sales at retail are forecast to reach 972,400, up 5% from February 2013 and up nearly 18% over January sales.

Even as sales are forecast to improve, prices too are expected to reach their highest-ever level for the month. The average retail transaction in February is forecast at $29,000, more than $400 higher than the record high posted last February. J.D. Power expects consumer spending on new vehicles to exceed a total of $28.3 billion in February, an increase of $1.7 billion from February a year ago and another all-time record for the month.

Including fleet sales, the total number of light vehicles sold in February is expected to reach 1.2 million units, up 3% from February a year ago. February’s seasonally adjusted annual rate of sales for the full year is 15.7 million units. LMC Automotive expects sales to total 16.2 million units in 2014, with 13.3 million of those sales at retail. The research firm’s head of forecasting said:

With the likelihood of fleet sales holding below 18 percent and modest retail sales increases, the absolute rate of growth could be lower than initially expected. The auto industry needs to be prepared for slower but stable growth and increased competitive intensity, which will put pressure on the successful execution of launches this year.

New car production has been hit by the unseasonably cold weather in the South. Production has been lower in both January and February, but inventory levels began the month with 88 days of supply, up from 24 days of supply at the beginning of January. Another LMC manager noted:

While inventory levels are excessive at this point, demand during the spring selling season will help resolve the situation. However, if inventory is not cleared out by June, production levels in the second half of the year are at risk.

LMC has lowered its 2014 North American production forecast by about 100,000 units to 16.5 million. Even with the reduction, new car production is still forecast at its highest level since 2000.

About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.