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VOL. 129 | NO. 23 | Tuesday, February 04, 2014

Frigid Weather Pulls January Auto Sales Down 3 Percent

DEE-ANN DURBIN & TOM KRISHER | AP Auto Writers

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DETROIT (AP) – Auto sales slid 3 percent in January as bouts of snow, ice and frigid temperatures in much of the country kept buyers snug in their homes instead of venturing out to car dealers.

People bought just over 1 million vehicles last month in the U.S., about 32,000 fewer than a year ago. It was the first year-over-year monthly sales drop since August of 2010, according to Ward's Automotive – but one that analysts said should be short-lived.

General Motors, Toyota and Ford – the top-selling companies in the U.S. – all reported falling sales due in large part to the weather, as did Volkswagen. But Chrysler, Honda, Nissan, Subaru and Hyundai dealers were happy. Sales ran counter to the thermometer and were up for all five brands.

The industry saw double-digit gains in the West, where the weather was good. But there were big declines in other regions hit by storms.

Dealers saw the impact firsthand.

"When you go three days when no one comes on the lot, it's a little tough to be up to average," said Timothy "Bruce" Detweiler, dealer principal of a Buick-GMC dealer in Masontown, Pa., about 50 miles south of Pittsburgh. Temperatures there were near or below zero for several straight days.

GM said its sales dropped 12 percent compared with the same month a year earlier, while Ford dropped 7.5 percent and Toyota declined 7 percent. Volkswagen slumped 19 percent. But Chrysler's sales advanced 8 percent, while Nissan's rose nearly 12 percent. Subaru saw a 19 percent increase, Honda went up 2 percent and Hyundai was up 1 percent.

With wave after wave of storms hitting much of the country, consumers weren't in the mood to go car shopping, said Jeff Schuster, senior vice president of auto sales forecasting for LMC Automotive, a consulting firm. "Right now we're looking at this as an anomaly and a temporary setback because of external factors," Schuster said. He said it could take a couple of months to recover the lost sales because of predictions for more harsh weather in February.

Sales for the month ran at an annual rate of 15.24 million, about flat with last year, according to Autodata Corp.

Still, Schuster is sticking with his forecast of sales rising to 16.2 million for the full year. He says the fundamentals remain in place for a return to pre-recession levels, including low interest rates, wide loan availability, aging cars and trucks on the roads and attractive new products from many automakers. Last year's sales hit 15.6 million, more than 4 million above the 2009 trough of 10.4 million.

Newly introduced vehicles helped Chrysler, Nissan and Subaru to their gains. Chrysler notched its best January in six years, with Jeep brand sales up 38 percent, led by the new Cherokee small SUV. Nissan sales gained 11.8 percent, led by the redesigned Rogue small crossover SUV with sales up 55 percent. And sales of Subaru's redesigned Forester SUV jumped 64 percent over last January.

Most automakers with sales declines blamed the weather.

At GM, sales of most high-volume models were down. Sales of the Chevy Silverado pickup, GM's top-selling vehicle, shrank more than 18 percent. At Ford, sales of the Focus small car plunged 26 percent from last January, while F-Series pickup sales were flat. Ford's Lincoln luxury brand was the bright spot, with a 43 percent increase.

Sales of Toyota's Camry, the top-selling car in the U.S., plunged almost 27 percent from a year ago. But Bill Fay, head of the Toyota Division in the U.S., said Camry sales in January 2013 were boosted by a high number of so-called fleet sales that had been delayed due to Superstorm Sandy.

Fay said an order to dealers to stop selling some models with heated seats had little impact in January, and shouldn't significantly affect February. On Thursday, Toyota told North American dealers to stop selling six models, including certain Camrys, with heated seats because the fabric doesn't comply with U.S. fire safety codes. The order affected 36,000 vehicles on dealer lots, about 13 percent of inventory. No fires or injuries have been reported.

Fay said he expects the cars to be fixed in about two weeks.

In Pennsylvania, Detweiler is hoping that those who didn't leave their homes during the streak of bad weather will venture out and buy in February.

"Historically, a lot of times when they're stuck in the house, they end up researching cars," he said. "Sometimes we have a good month the next month because of really bad weather."

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 72 238 10,116
MORTGAGES 103 297 13,172
FORECLOSURE NOTICES 20 60 2,598
BUILDING PERMITS 192 562 24,086
BANKRUPTCIES 75 227 9,760
BUSINESS LICENSES 20 71 3,674
UTILITY CONNECTIONS 126 390 14,353
MARRIAGE LICENSES 15 68 3,131

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