Early read on March auto sales


An early read on automobile sales from J.D. Power and Associates indicates sales for March are tracking at an annual selling rate of 15.6M.

The mark is slightly below the research firm's forecast of 15.8M.

Analysts sees March as a make-or-break month for the industry if it hopes to reach full-year expectations after weather stalled traffic during the January and February.

Prices will also be closely watched in March with inventory levels running high. Kelley Blue Book notes the average transaction price in March is up 1.6% Y/Y to $32,100 so far.

Related stocks: GM, F, TM, FIATY, HMC, NSANY, TSLA, VLKAY, DDAIF, HYMLF, BAMXY.

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Comments (14)
  • 3D Investing
    , contributor
    Comments (1552) | Send Message
     
    Why is TSLA tagged here. Monthly auto sales for the industry is huge. Tesla sells less than .1% of that. The up and down of those numbers have 0 impact on Tesla sales because Tesla is still supply constraint by far.
    24 Mar 2014, 08:45 AM Reply Like
  • Keith_69
    , contributor
    Comments (177) | Send Message
     
    Well they are an auto manufacturer and they are judged by the number of cars they produce. So yes, put them in there. You can't manufacture something and then turn around and not want to be classified by that same thing.
    24 Mar 2014, 09:15 AM Reply Like
  • Tdot
    , contributor
    Comments (8394) | Send Message
     
    I don't see why March has to be "a make-or-break month for the industry if it hopes to reach full-year expectations after weather stalled traffic during the January and February".

     

    Winter still hangs on in much of the northern half of the US with subfreezing temperatures in the daytime, and folks are waiting for spring to break before risking getting road salt and chemicals all over their pretty new car. The hypothetical "pent-up demand" hasn't really changed (in fact it is probably higher now), and "spring fever" hasn't really kicked in yet as folks are still in hibernation, with the lawn brown, the trees barren, and the garden dead. There is reason to believe that folks will soon emerge from their burrows, smelling the flowering trees and daffodils, and rejoicing that the Long Winter of '14 is finally over.

     

    There is also the matter of potholes and the severe damage they can cause. They have hardly begun to sprout, but the cracks are starting to appear. The vehicle attrition could be overwhelming as the northern roads freeze and thaw and crumble into chunks of gravel and dust. The half of vehicles on the road that are 10+ years old are especially vulnerable to death by a thousand potholes.

     

    The dealerships could be absolutely overrun with consumers clamoring for a new car in April and May.

     

    Of course, that does not help the first quarter results, and 1Q14 could be significantly down from the past couple of years. It should not be surprising to anyone who has had to endure one of the toughest winters in modern history.
    24 Mar 2014, 09:42 AM Reply Like
  • Keith_69
    , contributor
    Comments (177) | Send Message
     
    Living in the northeast, I'm going to disagree with you. I don't consider it a tough winter. It was just winter, we had snow, and ice and it got cold. Compared to last two years, they were less winter like _vs_ this was a 'tough winter'

     

    Oddly though I have lived here for 90% of my life and of all the things you list, I have never considered any of those things (pot holes/salt) when buying a new vehicle. In fact my last vehicle I purchased I bought it in the last week in December several years ago.
    24 Mar 2014, 09:51 AM Reply Like
  • Tdot
    , contributor
    Comments (8394) | Send Message
     
    Keith - Talk to the National Weather Service and The Weather Channel.

     

    http://wxch.nl/1iUqY63

     

    Much of the northern states and many major northern cities set all time records for well below normal temperatures and much above normal snowfall. Detroit is poised to break an all time historical record for snowfall, dating back to the "mini ice age" winter of 1880-81: 93.6" - or 7' 9.6" of mountain-class snow, which has barely started to melt where it has been piling up since December. The all time cold records were already broken.

     

    Your experience notwithstanding. Maybe your area missed out on all the fun, while the rest of the nation hunkered down and froze, day and night.
    24 Mar 2014, 10:39 AM Reply Like
  • Ralph270
    , contributor
    Comment (1) | Send Message
     
    I also live in New England and I purchased most of my cars in March or later. I wouldn't buy a car in Jan or Feb. mostly because I rely on some Tax money to make the purchase. I file early and usually my refund comes back sooner than later. I am in the process of waiting for the New F150 to be on sale so I will be most likely making my purchase for that once it has some feed back and kinks worked out so I guess that purchase will be around next March or so. I think most New Englanders feel good winter is almost over and head out for new cars after Feb.. Kind of like spring cleaning.
    24 Mar 2014, 01:18 PM Reply Like
  • rovo
    , contributor
    Comments (375) | Send Message
     
    I'm expecting a pretty bad Q1 for Ford, maybe even below the low expectations offered by Ford. China and Europe are looking a little better but I think the USA sales will suffer due to the weather. My expectation is a share price of about $13.50 after the Q1 report. I'll be using this low price to bolster my already large position in Ford and to pick up some $15 Call Leaps.
    24 Mar 2014, 10:46 AM Reply Like
  • Tdot
    , contributor
    Comments (8394) | Send Message
     
    $13.50 would certainly not be be out of line as a floor, with a forward P/E close to 10.
    24 Mar 2014, 10:55 AM Reply Like
  • joeinslw@gmail.com
    , contributor
    Comments (1067) | Send Message
     
    rovo--What about GM? They are going to be sued by so many car owners because they knew of the defects, but still sold these cars, how do you think that will effect them, and GM's stock price?
    24 Mar 2014, 11:05 AM Reply Like
  • rovo
    , contributor
    Comments (375) | Send Message
     
    @joeinslw, I do not follow GM. I want nothing to do with them.
    24 Mar 2014, 01:12 PM Reply Like
  • Tdot
    , contributor
    Comments (8394) | Send Message
     
    With $10B in taxpayer cash that will never be returned, and another $15-20B in tax exemptions that go out probably 5 more years of tax-free profits, and no warranty or liability or responsibility for actions or inactions by the "old" GM (now known as "Motors Liquidation Company"), the "New GM" is probably confident that the financial implications of the ignition switches are essentially nil, aside from the logistics aspect. The litigants would have to go after Motors Liquidation's Trust Funds which are guarded by a Federal Judge.
    24 Mar 2014, 01:59 PM Reply Like
  • ted lujan
    , contributor
    Comments (1624) | Send Message
     
    F is down .71%; GM is down 1.77% this morning. Every thing else in my portfolio is tanking. Bad numbers must have been expected. Good day to cover shorts on Ford.
    24 Mar 2014, 11:43 AM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (3904) | Send Message
     
    Tesla is lowering its price in Europe due to poor sales.
    http://bit.ly/1djiuVX
    24 Mar 2014, 02:34 PM Reply Like
  • Doc's Trading
    , contributor
    Comments (1847) | Send Message
     
    Technical comment.....As I predicted the day of the high at 265... TSLA has returned to fill its trading gap at 218 and can now be considered for a trading rally only until such time as current and new patterns lend themselves to further prediction....
    more later
    24 Mar 2014, 02:58 PM Reply Like
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