Robust sales and decreased incentive spending indicate a healthy industry
TrueCar, Inc., the negotiation-free car buying and selling mobile marketplace, projects the pace of February auto sales expanded to a seasonally adjusted annualized rate (SAAR) of 16.7 million new units on continued strong consumer demand.
New light vehicle sales, including fleet, should reach 1,295,600 units for the month, up 8.5 percent over a year ago. This same increase is expected on a daily selling rate (DSR) basis with 24 selling days this February versus a year ago.
“Strong February auto sales signal a very healthy U.S. economy,” said Eric Lyman, vice president of industry insights for TrueCar. “Given this month’s robust demand, the industry remains on track to hit TrueCar’s 17 million-unit projection for the 2015.”
With GDP expanding for a third consecutive quarter and a healthy stock market – the Dow Jones industrial average has gained 12 percent in the past year as of February 20 – the U.S. economy is on solid footing. Additionally, sustained low gas prices continue to buoy consumer confidence and support increased personal consumption expenditures.
While the outlook for 2015 auto sales and U.S. economic expansion is upbeat, this month’s disruption in operations at West Coast ports may have some impact. A preliminary resolution between workers and port operators was announced February 20 after a standoff that slowed shipments of parts and imported vehicles to some automakers. February auto sales appear unaffected though Japan-based manufacturers such as Honda, Toyota and Subaru curbed production this month, a move that may tighten March inventories.
Incentive spending by automakers averaged $2,623 per vehicle in February, down 2.9 percent from a year ago and up 1.4 percent over January 2015.
“Automakers should expect to post net revenue gains this month,” said Lyman. “With overall restrained incentive spending, natural consumer demand is driving the increase in sales this month.”
Other key findings for February:
Expected registration mix of 81.8 percent retail sales and 18.2 percent fleet versus 80.7 percent retail and 19.3 percent fleet last February.
Total used auto sales, including franchise and independent dealerships and private party transactions, may exceed 3,315,654, up 1.5 percent compared with February 2014.
Forecasts for the 10 largest manufacturers by volume for February 2015:
TrueCar, Inc. (NASDAQ: TRUE), the negotiation-free car buying and selling mobile marketplace, gives consumers transparent insight into what others paid and access to guaranteed savings off MSRP from TrueCar Certified Dealers. TrueCar’s network of more than 10,000 trusted Certified Dealers is committed to providing upfront pricing information and a hassle-free buying experience. TrueCar powers car-buying programs for some of the largest U.S. membership and service organizations, including AARP, American Express, AAA and USAA. Not all program features are available in all states. TrueCar is headquartered in Santa Monica, California, with offices in San Francisco and Austin, Texas.