By Aaron Bragman on February 28, 2013
All the talk these days seems to be on spending cuts and frugality, but you wouldn't know it from looking at February sales. Overall, the market was up more than 4%, with only half of the top automakers posting gains over February 2012. Growth was solid, but not breakneck like we've seen in the last couple of years, indicating the auto industry may be slowing down. Declines for Nissan, Hyundai and Honda indicate some possible softening of the market.
Same thing at Ford, with Fiesta, Focus and Mustang all showing declines (not Fusion, however, which had a great month) while F-series trucks, Explorer and Escape all saw double-digit increases. Chrysler had a mixed month, with the Dodge brand up 30% to keep things positive overall, but the company's light trucks slipped 8%, the decline mostly coming from Jeep and its discontinuation of the Liberty and a cautious launch of the 2014 Grand Cherokee. Toyota showed strength with a 4.3% year-over-year gain, but sales of key models like the Prius and Camry were down. Honda posted a decline as well, despite a significant jump in Accord sales.
Incentives were basically stable for the month, with little movement up or down. The top sellers had stable or lower incentives versus year-ago levels, with cash and financing deals on some newly redesigned cars (Fusion and Malibu) declining slightly. It would appear that the new lower price for the Malibu did little to move the needle, with the car dropping 25.9% year-over-year, but the new Fusion seems to be resonating soundly with consumers; it's up 28.0%.
For consumers looking to buy new a car now seems to be a good time to do it. Reports suggest that financing is again flowing freely, and rates for new car loans were the lowest in years. "We have the best financing available for our customers ever," Mike Jackson, CEO of AutoNation Inc., told a conference last month, according to Automotive News. It's a claim backed up by data from banks indicating that the typical 48-month new-car loan was at 4.82% as of November 2012, the most recent reporting period.
Helping to drive Americans to new cars may be used-car prices, which are on the upswing again after falling through most of 2012, possibly due to the effect of Hurricane Sandy taking large amounts of used vehicles off the market. Going forward, however, may be dicier with the effects of the just-announced government spending cuts lending an element of uncertainty with regard to consumer and fleet purchasing.
Detroit Bureau Chief Aaron Bragman grew up in the Detroit area, comes from an automotive family and is based in Ann Arbor, Mich. Email Aaron