Winter Storm Jonas acted like a wet blanket on new vehicle sales in January.
The fierce winter storm that kept a third of the U.S. population indoors this past weekend has slowed auto sales, according to analyst and car makers.
As residents of the U.S. East Coast dig out from Winter Storm Jonas, which dumped more than two feet of snow in major urban areas from New York City to the northern Virginia suburbs of Washington, D.C. appears to have flattened total new vehicle sales, according to estimates prepared by TrueCar, Inc. of Santa Monica, California.
TrueCar expects total new vehicle sales, including fleet deliveries, will be flat from a year ago, notching a 0.3% decline.
Consumers will likely buy 1.1 million new cars and trucks in January, the slowest selling month of the year. However, adjusting for two fewer selling days this year than in January 2015, sales growth may be 8% on a daily selling rate basis. The seasonally adjusted annualized rate for total light vehicle sales should be 17.6 million units, up 5% from a year ago.
(Toyota retains global sales lead for 2015. For more, Click Here.)
Nevertheless, several carmakers, among them Fiat Chrysler, Subaru and Audi, have long strings of monthly sales increases in jeopardy for January as the tempo of sales slowed perceptibly from the blistering pace during the autumn, which pushed new car deliveries to record levels in 2015.
“Jonas curtailed business for many dealerships on the East Coast, but January is typically one of the slowest months for the industry, especially following holiday and year-end sales events,” said Eric Lyman, TrueCar’s vice president of industry insights.
“Severe winter weather isn’t ideal for car shopping, but we see signs of strength heading into 2016 and expect consumers to buy a record 18 million new vehicles this year.”
Dave Zuchowski, chief executive officer of Hyundai Motor America, noted, “We lost an entire weekend.” Virtually all manufacturers are seeing slower sales this month, he said.
(Click Here for details about Jeep setting a new sales record in 2015.)
BMW may post the best year-over-year sales gain, on pace to report a 6.8% rise in volume. Nissan will likely follow with a 2.7% sales increase in sales. General Motors may rank third, with a 1.9% increase in sales and the highest total volume of the industry, True Car estimates noted.
Volume for non-luxury, mass-market brands will likely contract by 1.1% versus last year, while luxury vehicle sales may grow by 4.4%. Compact crossover models remain particularly popular this month and will be among the industry’s biggest volume segments.
“Consumer preference has clearly shifted to crossovers, and that will contribute to a fourth consecutive year of contraction for the midsize car segment,” said Stacey Doyle, TrueCar’s senior industry analyst. “Light trucks will again outpace cars this year, with pickup trucks and utility vehicles likely accounting for 56% of total new vehicle volume.”
Incentive spending by automakers averaged $2,932 per vehicle in January, up 13.4% from a year ago and down 4.2% from December 2015.
(To see more about GM setting a new global sales record last year, Click Here.)
Despite global stock market volatility since the start of the year, overall U.S. economic conditions remain healthy. The Conference Board, for example, noted this week that its index of consumer confidence increased by 1.8 points in January from a month earlier to 98.1. December’s unemployment was 5%, the lowest for that month in eight years, and gasoline prices also remain favorable for consumers, falling to a national average of $1.83 this week, compared to $2.04 a year earlier, according to AAA’s nationwide survey of gas station pricing.