February U.S. Auto Sales to Edge Up with Record Rebates
U.S. auto sales will eke out a 0.6% gain in February vs. a year ago with strong demand for trucks. Total (retail and fleet) deliveries are set to reach 1.35 million units vs. 1.34 million a year ago, primed by robust incentives, according to a sales forecast update from J.D. Power and auto forecasting partner LMC Automotive.
Sales data collected during the first 16 days of the month projects that retail new car and light-truck deliveries will likely reach 1.033 million units, up 0.4% from 1.029 million units a year ago. Fleet sales are predicted to total 316,700 units, for a 1.4% gain from February 2016, and will account for a slightly higher 23.5% of the sales mix. Last year, fleet deliveries made up 23.3% of total deliveries.
Light trucks remain best sellers in February, and so far make up 63.7% of the retail sales total—the highest percentage for any February on record, but lower than December’s all-time high of 64.4%.
Even with bad weather slowing sales at the beginning of the month, record incentive levels—an average $3,748 per unit, which equates to 10.3% of MSRP—will help total deliveries rise, said Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power. The mid-month update also reports that the average new-vehicle retail transaction price in February is $31,483, a record for the month.
Demand for light vehicles is expected to maintain overall strength, concurs Jeff Schuster, senior vice president of LMC Automotive, who adds that there are variables that could impact the market as the year progresses. He said these include: “the level of economic growth, a potential border tax or tariff, vehicles coming off lease, and the introduction of more than 60 new models.” LMC Automotive still predicts that 2017 total sales will inch up 0.2% to 17.6 million units.