Polar Vortex Slams January Car Sales
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DETROIT (WWJ) - Unless they were selling Jeeps or Subarus, most car companies reported rough sales in January. Overall, industry sales are trending down about 2 percent from a weak January of 2013.
“There’s no question, weather is certainly the culprit of the low numbers we’re seeing reported,” said analyst Jeff Schuster of LMC Automotive.
GM sales dropped 12 percent. Toyota and Ford both posting 7 percent sales declines.
“A lot of this occurred because we had some really bad weather throughout the U.S., both in the beginning of the month, and toward the end of the month,” said Ford analyst Erich Merkel.
Chrysler posted an eight percent sales increase for January.
“The bad weather only seemed to affect our competitors’ stores as we had a great January with sales up 8 percent and achieved our 46th-consecutive month of year-over-year sales increases,” said Reid Bigland, Head of U.S. Sales. “In addition to a strong sales start to the year, last month we also reported 2013 full-year profits and unveiled the all-new Chrysler 200, our strongest entry yet in the mid-size sedan segment.”
The new Jeep Cherokee pushed that brand up 38 percent. All of Chrysler’s brands were up, and it was a particularly strong month for the Chrysler 200 mid size car, even as a new version was introduced at the North American International Auto Show.
Chrysler anticipates a seasonally adjusted annual sales rate of about 15.6 million.
“Our dealers found a way to get the job done, even when weather hampered their efforts,” said Chrysler spokesman Ralph Kisiel.
Subaru, with its lineup of all wheel drive vehicles, saw its sales rise 19 percent.
“Our crossover models are the mainstay of our growth but we expect our sedan models to follow that trend in 2014 with the launch of the all-new Legacy which will take that model into new territory,” said Subaru sales Vice President William Cyphers.
Nissan, flush with new products saw its sales rise 11 percent. Volkwagen, on the other hand, has some products that have been on the road a while, and their sales are down 14 percent.
“Overall, in January, the big story is the weather,” says Jessica Caldwell, Senior Analyst at Edmunds.com.
It was more than just bad weather on one part of the country, says Caldwell.
“When there’s a big snowstorm in a place like Chicago, they are ready for it. But, when it’s Atlanta, it’s not the case.”
The impact of the weather becomes clear when you break down the sales report by region, says analyst Alec Gutierrez of Kelley Blue Book.
“We looked through the data and we looked at sales volume from the east coast, midwest and other areas that were impacted the weather, compared to, say the west coast and the southwest, where weather wasn’t a factor. There was a noticeable slowdown on those colder states.”
“The auto industry cannot escape the throws of the polar vortex and the winter blues in general,” said LMC Automotive analyst Jeff Schuster.
The weather will get nicer, says LMC Analyst Jeff Schuster, and better sales will follow.
“Once we eventually thaw out of this, we’ll see the sales bounce back. We should have a strong spring ahead of us.”
Car and truck sales have been on a growth trend. Ford President of the Americas Joe Hinrichs says there is nothing in the January sales report to suggest that trend has been interrupted.
“The fundamentals of what’s going on with auto demand in the economy… are all still moving forward. We feel optimistic that the 2014 industry will be better than 2014.”
A seasonally adjusted annual sales rate in the mid 15 million range is still not bad for January, says Larry Dominique of TrueCar.com. It just comes when we’ve become used to steady growth.
“I don’t think it’s a bad month. It’s not a good month. It’s just one of those months when the sales executives are probably glad its February.”
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