Dealers in the U.S. are closely monitoring sales in the last few days of March as it appears on track to be on a year-over-year sales drop. If deliveries are unable to pull up sales, March will be the 6th month since 2009 that will display this trend. Auto sales growth has been consistent for quite some time and so the decrease implies that the market has started to flatten out.
According to analysts, 2015 is still expected to stay within projections of around 17 million vehicles. It is also forecasted that Fiat Chrysler Automobiles will be able to continue its series of successive monthly gains to five years. The last time that industry sales slipped year-over-year was in February 2014. March sales will drop by 0.8%, according to TrueCar.
Meanwhile, Kelley Blue Book predicts a 0.3% decrease. LMC Automotive believes that sales will go up 0.3 percent. Brian Johnson, a Barclays Capital analyst, estimates that sales will drop 1.6% but there may be a slight increase if it does strongly in the last week of March. In a statement, TrueCar’s vice president of industry insights Eric Lyman, said that he isn’t surprised that total volume has slightly declined.
He cited that while it’s now spring, many people are “still pushing away snow piled up at the doorstep.” He added that TrueCar is bullish on the retail outlook for the second half of 2015 and that the industry continues to be on track to achieve its estimate of 17 million units this year. He pointed out that there may be a seasonally adjusted, annualized sales rate of 16.8 million to 17 million units – an increase from 16.2 million in February and 16.5 million one year ago.
Due to winter still being evident in February, sales were lower than expected in several regions. March sales figures will be reported by automakers this Wednesday. In a statement from KBB analyst Alec Gutierrez, it’s believed that the bounceback in March is “less pronounced” when compared to last year since March 2015 has one fewer weekend to try to make up for the loss of sales in February.
Nonetheless, the economy is strengthening and this has helped boost sales. In February, new home sales reached its highest in 7 years and the Consumer Price Index went up 0.2% after being on a decline for three straight months. The unemployment rate in Michigan has also fallen to below 6% in February – the first time that it has gone below this line in 14 years.
JD Power said that because of these factors, the industry’s average transaction price in the first part of this month climbed to $30,530. This marks the highest level ever for March. There’s another reason cited for this increase. Loans that have terms of a minimum of 6 years have made up over 35% of retail sales to date this month.
This may set a record if it continues in this pace. LMC predicts that with fleet deliveries excluded, retail sales may reach the highest level for any March since 2002 (with a growth of 0.2% or by 2,795 vehicles compared to the previous year). Jeff Schuster, LMC’s senior vice president of forecasting, said that the U.S. remains to be “one of the brighter spots in the global vehicle sales picture in 2015 with stable volume growth.”