U.S. auto sales fall in February, likely to continue to decline

U.S. auto sales dropped to 17 million units in the month of February from January’s print of 17.1 million units and 17.3 million units recorded a year ago. Almost all of the top selling brads saw declines compared to year ago levels, led by Hyundai. Ford, GM, Kia, Honda and Nissan all saw declines in the range between 4 percent and 7 percent, while FCA’s decline was more modes. Toyota managed to buck the trend, with sales rising 5 percent in the month. Sales of light trucks rose 3.8 percent year-on-year in February and accounted for 68 percent of total sales, rising from 64 percent a year ago. On the contrary, passenger car sales dropped 12.6 percent year-on-year.

The slower rate of sales compared to the fourth quarter of 2017 implies that autos will be a drag on consumer spending growth in the first quarter of the year, noted TD Economics in a research report. But at 17 million units, auto sales are still quite healthy, especially given the changing market dynamics.

Indeed, some of the main drivers that have propped up auto sales in recent years have started to fade: credit condition have tightened, interest rates have been trending up, and pent up demand has been satiated. As these trends continue, auto sales are expected to continue to drop, stated TD Economics.

“That said, a strong economy with solid employment and wage growth should remain supportive for the industry, helping to keep sales at a healthy level in the 16.5-17 million unit range this year”, added TD Economics.

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