General Motors, Ford, VW U.S. sales fall as weather pounds most of nation
This Feb. 19, 2012 file photo shows the familiar Chevrolet bowtie logo displayed on the grille of a 2012 Cruze sedan, foreground, with a 2012 Sonic sedan in the background at a Chevrolet dealership in the south Denver suburb of Englewood, Colo. (AP Photo/David Zalubowski, File)
Tom Krisher , The Associated Press
Published Monday, March 3, 2014 9:09AM EST
Last Updated Monday, March 3, 2014 10:33AM EST
DETROIT -- General Motors and Ford reported U.S. sales declines last month as frigid temperatures and snowstorms pounded much of the nation.
The country's top two automakers both said the month started slowly but sales began to recover in the second half, a sign that fears of a broader auto sales slowdown may be unfounded. Also, Chrysler and Nissan reported double-digit gains, although they had to discount some key models to get there. Volkswagen, which has been struggling in the U.S., reported a 14 per cent drop.
Industry analysts expect overall sales to rise about one per cent for the month, a slow pace compared with 8 per cent increase for all of last year. Most blame the weather, but some are wondering if the momentum of the past four years is waning.
Dealer inventories, especially for the Detroit automakers, have hit their highest level in five years, putting pressure on companies to clear their lots. At the end of January, dealers had an 89-day supply of cars and trucks, according to Ward's AutoInfoBank. Detroit automakers had the most, with General Motors at 114 days, followed by Ford at 107 and Chrysler at 105. A 60-day supply of vehicles is considered ideal.
To unload the inventory, automakers are offering more discounts. That means deals for consumers. Incentives are the highest they've been in three years, averaging $2,633 per vehicle in February, up more than 5 per cent from a year ago, according to the TrueCar.
Larry Dominique, executive vice-president of TrueCar, said automaker spending on discounts is growing faster than average sales prices, but he predicted that the bargains will wane as the weather gets warmer and customers return to dealers.
"We expect a return to balance once the winter subsides and inventories ease," he said.
GM says it sold just over 222,000 cars and trucks, led by the Chevrolet Cruze compact car, with sales up almost 22 per cent. But sales of the Chevy Silverado pickup, GM's top-selling vehicle, fell 12 per cent for the month.
Ford sold nearly 184,000 vehicles, but sales of cars fell almost 14 per cent. Sales of the F-Series pickup, its top-selling vehicle, rose just under 3 per cent.
Chrysler and Nissan were able to lure customers onto icy-cold dealer lots by lowering prices on some key models.
Nissan said Monday that its sales were up almost 16 per cent to just over 115,000. Chrysler sales rose 11 per cent to nearly 155,000.
Chrysler was led by the Ram pickup with a 26 per cent sales gain, while Nissan was led by the Rogue crossover SUV with sales up almost 73 per cent.
Nissan's average sales price fell almost 4 per cent -- more than $1,000 -- compared with a year ago, according to the TrueCar.com auto pricing site. While Chrysler's average sale price was up 6 per cent, it boosted discounts on the Ram pickup, its most popular model, by $593 compared with a year ago, according to data collected by J.D. Power and Associates.
The Associated Press got the J.D. Power data from a person who asked not to be identified because the numbers aren't typically released to the public.
The Ram discounts averaged just under $5,000. Ford and General Motors, its main competitors, offered around $4,000 per pickup. Despite the Ram increase, discounts in the pickup segment were down $548 compared with a year ago, according to the data.
All automakers are due to report February sales on Monday.