Cox Automotive Forecast: U.S. Auto Sales Expected To Rise From Weak January

ATLANTA, Feb. 25, 2019 /PRNewswire/ -- According to a forecast released today by Cox Automotive, new-vehicle sales pace in February is expected to rise to 17.1 million units, an increase from January's weak, weather-impacted 16.6 million level. The pace should also rise modestly over last February's 16.9 million, which was the slowest in the first half of 2018.

Sales volume of 1.31 million units forecast for February is expected to up 0.7 percent over last year, as some delayed purchases from the prior month lift the market.

"Although this month is expected to have an uptick from last month, this does not suggest the market is returning to last year's 17.2 million level," said Charlie Chesbrough, senior economist at Cox Automotive. "In fact, the SAAR this month will be an important early 2019 signal as to the strength of the vehicle market. January's pace was below expectations, but the 'big freeze' across much of the country the during the last week of sales likely disrupted activity. Some lift in February's sales is expected as delayed vehicle buyers complete their purchases. If February's sales come in weaker than expected, like January, then we may be in the early stages of the vehicle market's shift to a much slower pace."

As the year progresses, affordability, tariffs, off-lease volume and car share are all market influences that could affect the new-car market. Industry watchers have been expecting the vehicle market to slow down, yet the pace has remained strong. Since March 2015, the monthly SAAR has averaged 17.3 million, but many forecasts – including Cox Automotive's – predict this pace to finally decline in 2019. January was one data point in that direction, and February may be as well.

February, like January, is one of the weakest months for sales on the automotive calendar. The hectic end-of-year market activity that occurs in December slows dramatically at the start of each year. And, fewer car shoppers want to roam dealer lots when weather is cold, so sales volume is light during the dark days of winter. The record for February occurred in 2000 when vehicle sales reached 1.5 million for the month, and a SAAR of 18.9 million. Reaching a new record this February is highly unlikely as volume over the last four years has average only 1.3 million, well below the additional 200,000 sales needed.

Key Highlights for February 2019 Sales Forecast:

• In February, new light-vehicle sales, including fleet, are expected to reach 1.31 million units, up nearly 9,000 units, or 0.7 percent, from February 2018. Sales will also be up nearly 190,000 vehicles, or 17 percent, over January.
• The seasonally adjusted annual rate (SAAR) in February 2019 is estimated to be 17.1 million, up from last month's 16.6 million level, and up from last year's 16.9 million pace.
• The record February SAAR occurred in 2000 when the pace reached 18.9 million, and the record volume was achieved as well, reaching 1.5 million.

Strength in Jeep brand should help lift Fiat Chrysler to a strong showing while weakness in car segments is likely to negatively impact Ford, Honda, Nissan and Toyota.

Most car segments should continue to see significant declines from last year as consumers continue to shift towards CUVs. A big question for the industry is whether a bottom in car sales is close, particularly if affordability becomes a greater issue in 2019. Some return to cheaper transportation options may provide support for car segments; however, that hasn't been seen in the data yet.

All percentages are based on raw volume, not daily selling rate.

Cox Automotive One-on-One Interviews and Quarterly Sales Conference Call

Cox Automotive is organizing one-on-one interviews with our industry experts on Friday, March 1. Analysts will be available to answer questions and provide insights on the results as they come in. Written commentary will be published and distributed by 11:15 a.m. EST on sales day. 

Save the Date: A quarterly sales conference call hosted by Chief Economist Jonathan Smoke will be held on Thursday, March 28. Joining Smoke will be Michelle Krebs, executive analyst for Autotrader, and Karl Brauer, executive publisher for Autotrader and Kelley Blue Book, to provide industry analysis and insights for the first quarter and a market outlook for the first half.

About Cox Automotive

Cox Automotive Inc. makes buying, selling and owning cars easier for everyone. The global company's 34,000-plus team members and family of brands, including Autotrader^®, Clutch Technologies, Dealer.com^®, Dealertrack^®, Kelley Blue Book^®, Manheim^®, NextGear Capital^®, VinSolutions^®, vAuto^® and Xtime^®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five countries and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. www.coxautoinc.com

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SOURCE Cox Automotive