January Auto Sales: American-Made

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Includes: AUDVF, F, GM
by: Wall Street Strategies

By Jennifer Coombs

While not nearly as strong as the holidays, the level of car sales in January gives us the first indication for softer retail sales in January’s economy. The number of cars and light trucks sold in the month of January declined by 1.2%, month-over-month. This resulted in a seasonally adjusted annual rate (SAAR) of 16.7 million versus the 16.9 million SAAR in December 2014. Weakness was centered on foreign-made cars, where sales declined by 8.8% to a SAAR of 3.1 million. On the other hand, domestic-made vehicle sales fell 0.7% to a 13.5 million rate. This report ultimately points to a second month of weakness for the motor vehicles component of the government's monthly retail sales report, which fell 0.7% in December. Retail sales numbers will be released on Thursday, February 12th.

Lower gas prices clearly made the difference in January as consumers weren’t buying stuff and houses – they were clearly buying cars. The six largest automakers reported double-digit sales gains in January over the prior year. General Motors (NYSE:GM) increased sales by 18.3% over last year, selling 202,786 vehicles while Ford (NYSE:F) boosted sales by 15.6% over last year selling 177,441 units. For this time of year, it’s interesting to see an increase in the number of luxury cars sold. Mercedes-Benz, Audi (OTCPK:AUDVF), Jaguar, Porsche and even Lamborghini all reported positive changes over January 2014. The biggest laggard was Bentley, although this doesn’t look to be a shift away from luxury. It just looks like those rich individuals are buying Lamborghinis instead.

Company

Change

Units Sold

General Motors

18.3%

202,786

Ford

15.6%

177,441

Toyota

15.6%

169,194

Chrysler

14.0%

145,007

Nissan

15.1%

104,107

Honda Motors

11.5%

102,184

Hyundai

1.1%

44,505

Subaru

23.7%

40,812

Kia

3.5%

38,299

Volkswagen

4.1%

35,228

Mercedes-Benz

9.3%

26,124

BMW

6.8%

22,276

Mazda

7.7%

20,271

Audi

14.3%

11,541

Jaguar / Land Rover

8.7%

6,547

Mitsubishi

33.4%

6,493

Porsche

27.2%

3,937

Bentley

-50.0%

96

Lamborghini

102.3%

87

In January, the negotiation-free car buying and selling found increased sales volume and higher transaction prices. Net revenues of $37.6 billion were generated for automakers, which is a 17.2% jump from a year ago. TRUECar estimates that new cars and light trucks expanded by 13.2% for the month, reaching the highest January volume since 2000. The average transaction price (ATP) for light vehicles came in at $32,812, which is up 3.5% from a year ago. However the average incentive spending per unit increased by $93 to $2,642, much lower than during the holidays. This made the ratio of incentive spending to ATP 8.1%, expanding slightly from 8.0% compared to January 2014.

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