Car sales skid in January; Mini, VW and Volvo biggest losers

U.S. light-vehicle sales, dampened by lower fleet shipments and severe winter weather across large chunks of the country, fell 3 percent in January. Among the biggest automakers, Nissan Motor Co. and Chrysler Group posted solid gains while volume fell at General Motors, Ford Motor Co., Toyota Motor Corp. and Honda Motor Co.

The seasonally adjusted annualized sales rate, a broader measure of the industry's performance, was flat at 15.2 million in January compared with a year ago. A total of 1.01 million light-vehicles were sold last month. It was the first decline in U.S. unit sales since volume slipped 4 percent in September, and the first drop in January deliveries since 2009, when the U.S. market was collapsing.

At one point last month, the SAAR was projected to accelerate to 15.7 million cars and light trucks, based on earlier surveys of economists and analysts by Bloomberg and Reuters. However, those projections proved too optimistic as severe winter weather crimped showroom traffic as far south as the Gulf Coast. Still, the SAAR has topped 15 million units every month beginning with November 2012.

"January's foul weather cooled things a bit," said John Mendel, executive vice president of automobile sales at American Honda. "We look forward to a warming trend."

Nissan leads

Nissan led the gains with January volume rising 12 percent to 90,470 units, a record for the month. Volume advanced 10 percent at the Nissan division and 26 percent at Infiniti.

The Nissan brand edged past rival Honda in U.S. sales: 81,472 to 80,808.

Chrysler sales rose 8 percent, with the Jeep brand and Ram pickup helping drive the company to its 46th consecutive monthly increase.

Volume dropped 12 percent at GM and 8 percent at Ford, with both companies posting lower retail and fleet shipments.

Sales fell 1 percent at Buick, 13 percent at Cadillac and Chevrolet, and 10 percent at GMC.

GM's retail sales dropped 10 percent year over year, although retail deliveries of passenger cars rose slightly, and fleet deliveries declined 18 percent. At Ford, retail volume declined 5 percent and fleet volume dropped 14 percent. Ford blamed weather for delays in some fleet shipments.

Volume declined 8 percent at the Ford division while Lincoln shipments surged 43 percent to 5,973 units.

"Given the difficult weather in our largest sales regions, we are fortunate to have held in at retail as well as we did," said John Felice, head of U.S. marketing, sales and service for Ford. "In areas where the weather was good, such as in the West, sales were up."

Meanwhile, Reid Bigland, head of U.S. sales for Chrysler Group, said in a statement: "The bad weather only seemed to affect our competitors' stores as we had a great January."

Chrysler's Jeep volume rose 38 percent last month while Ram pickup deliveries increased 22 percent to more than 25,000 units, Chrysler said. Deliveries of the new Jeep Cherokee totaled 10,505 units last month.

Sales jumped 29 percent at Fiat and 2 percent at the Chrysler brand, but skidded 19 percent at Dodge, with every Dodge car line posting a double-digit decline in volume.

Overall, Chrysler's car sales slumped 21 percent while light truck demand advanced 25 percent.

Solid start, slow end

Toyota's volume dipped 7 percent last month, with the Toyota division down 9 percent and Lexus volume up 9 percent.

"January was off to a solid start, but the weather condition slowed industry sales in key markets late in the month," Bill Fay, Toyota division group vice president and general manager, said in a statement. "We're pleased with our retail sales, strong truck results and expect to see growth back in February."

Analysts said January's winter weather had a chilling effect on sales beyond the nation's traditional snow belt.

A preliminary study by Edmunds.com found the second polar vortex last month affected a total of 37 states, which account for about 61 percent of all new-car sales.

"We expect most -- if not all -- of those sales to be made up in February, assuming this cold wave doesn't continue," Edmunds.com senior analyst Jessica Caldwell said Monday.

Hyundai reported sales grew by less than 1 percent to 44,005 vehicles but it was still enough to set a record for the month.

"January was a bit of a challenge due to weather issues across the country, making us wonder how many more units we could have sold," said Bob Pradzinski, vice president of national sales for Hyundai Motor America.

Among other brands posting lower sales, Porsche volume dipped 8 percent and Mazda's U.S. sales declined 12 percent, and Mini deliveries skidded 31 percent.

Audi sales remained flat with strong sales of the Q5 and Q7 SUVs offsetting a dip in sales of the A4 sedan and A5 coupe. The luxury brand, which posted a 14 percent gain in U.S. sales in 2013, predicted further growth in 2014, driven by the launch of the new A3 sedan this spring.

Volkswagen deliveries fell 19 percent, its fifth straight month of double-digit declines, as sales of the American-made Passat sedan plummeted 30 percent. But the brand expects to operate at a "steady pace" in 2014, Volkswagen of America's new vice president of sales, Mark Barnes, said in a statement.

Subaru, coming off a record year, said January sales jumped 19 percent to 33,000 units -- a record for the month for the all-wheel-drive specialist.

At Jaguar Land Rover North America, volume increased 15 percent in January to 6,021 units -- its best January since 2004.

Among major automakers, GM, Ford, Toyota and VW Group lost U.S. market share last month, while Chrysler, Nissan, Honda and Hyundai-Kia gained ground.

Weather effect

January is traditionally the weakest month of the year for light-vehicle unit sales. The historical pattern was compounded by the severe cold and snow storms. Detroit was among the cities to record the snowiest January on record.

"Our channel checks suggest January started well but floor traffic slowed significantly in the second half of the month particularly in the Northeast and Midwest regions due to inclement weather," Morgan Stanley analyst Adam Jonas said in a report late last month.

Attractive lease deals and widespread credit availability helped offset the impact from winter weather, Jonas said.

The average industry incentive for light vehicles was $2,452 in January, down 3 percent, or $80, from January 2013 and down 10 percent, or $284, from December 2013, TrueCar estimated today.

Automakers and analysts are forecasting another year of higher industry sales, though the gain is expected to be lower than the 8 percent rise in 2013 industry volumes.

The increase in sales and higher prices are creating a more profitable environment for the industry, as well.

But some analysts worry inventory levels are climbing to levels that may require higher incentives at the current pace of sales growth.

Chrysler said today it ended January with a 105-day supply of vehicles and GM reported a 114-day supply of inventory. Ford reported a 111-day supply of vehicles at the end of last month, up from 73 days at the end of December and an 89-day supply at the end of January 2013.

The average U.S. transaction price for light vehicles was $30,934 in January, up 3 percent, or $804, from January 2013 but down 1 percent, or $422, from December 2013, TrueCar estimated today.

Average transaction prices continue to rise and are at the highest levels in the last five years.

"The industry couldn't ask for a more ideal start to the year with transaction prices up and incentive spending down," said Larry Dominique, executive vice president of TrueCar and president of ALG. "Whether this type of healthy growth is sustainable remains to be seen."

Gabe Nelson contributed to this report.

U.S. sales skid 3% as weather takes toll; SAAR flat at 15.2 million units originally appeared on Automotive News.

By David Phillips- Automotive News