Longer, lower, roomier. Honda's 2016 Civic is one of the compact cars enjoying strong sales in February.
Despite the uncertainty that has rippled through the economy since the start of the year, new car sales have remained robust.
New-vehicle sales this month are expected to increase 8.1% from a year ago, according to a monthly sales forecast developed by J.D. Power and LMC Automotive.
The SAAR for total sales is projected to reach 17.7 million units in February 2016, up 1.4 million units from 16.4 million a year ago when much of the country was snowbound and the highest rate since 2000 when it briefly reached 18.9 million units.
“The year-over-year sales growth projection for February is strong, but we need to keep in mind that it is aided by the fact that sales in the upper East Coast, Midwest and Texas were hampered by weather last February,” John Humphrey, senior vice president of the global automotive practice at J.D. Power cautioned.
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“To further put the February sales projection into context, while the retail SAAR of 13.9 million is unquestionably a high level of vehicle demand, it is the lowest monthly level since last June and well below the 15.3 million pace last September.”
This month, the compact car segment posts the highest retail sales in the industry for the second consecutive month. “Demand for compact cars is driven, in part, by product activity: high incentives that are offered on outgoing vehicles ahead of the launch of the redesigned vehicle attract the budget-conscious, while all-new or redesigned models revitalize interest in the segment,” Humphrey added.
“Unfortunately, the improvement in compact car sales is not enough to offset weakening demand for cars overall, with marketshare for cars at only 42%, the lowest level on record for the month of February,” he said.
“This year we’re expecting small crossover and utility vehicles to outpace the compact car segment for a second-consecutive year,” said Stacey Doyle, TrueCar’s senior industry analyst. “However, small cars remain well-liked by many consumers and are still a high-volume contributor to the industry. Last year nearly one out of every seven sales was a vehicle from this segment,” Doyle said.
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J.D. Power/LMC estimated consumers will spend more than $32 billion on new vehicles in February, nearly $3 billion more than in February 2015 and for the first time exceed $30 billion in the month of February.
Consumers are opting for leasing and long-term loans at record levels. So far in February, leases and loans of 72 months or longer combine to represent 65.1% of all retail sales, a record level for any month. The previous record was set in January 2016 at 64.3%. tje report added/
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said sales are unfolding as expected by recent forecasts. “With February looking to keep the selling rate in line with expectations, consumers seem to be shrugging off the volatility in the stock market and higher interest rates,” Schuster said.
“Very low fuel prices and many new vehicles in showrooms should help drive another strong year for auto sales,” he said.
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LMC Automotive’s forecast for 2016 remains 17.8 million units for total light-vehicle sales and 14.5 million units for retail light-vehicle sales.