Winter Weather Freezes New Car Sales
After a strong 2013, new car sales were mixed in the first month of 2014.
Automotive News reports that in January, “Automakers and dealers sold 1,011,187 light vehicles for the month. The seasonally adjusted annual selling rate was 15.2 million, virtually unchanged from last January, but down slightly from December's 15.4 million SAAR.”
Most analysts agree that abnormally cold weather and high snowfall kept car shoppers away from dealerships. Jessica Caldwell, senior an analyst at Edmunds.com, says, "The weather clearly affected January sales, and not just in traditionally cold areas. After the first polar vortex at the beginning of the month, we saw the market start to make up some of those lost sales. But by the time the second vortex struck last week, there wasn't enough time to make up all of January's lost sales. A preliminary study finds that the second polar vortex affected a total of 37 states, which generally account for about 61 percent of all new car sales. We expect most - if not all - of those sales to be made up in February, assuming this cold wave doesn't continue."
The 3 percent drop in new car sales overall from January 2013 wasn’t spread evenly among all automakers. While Ford and General Motors saw sales declines of 7.5 and 12 percent, respectively, Subaru sales shot up 19 percent and Nissan saw a 12 percent sales jump.
Though sales declines typically mean better deals for car shoppers, that may not be the case now. Car companies have gotten better at managing their inventories, and this drop is being seen as a temporary dip. Plus, according to Kelley Blue Book, the slow sales in January only lead to a 1.4 percent decline in the average new car sale price compared to December 2013, which works out to savings of just $464 on average for buyers. If new car, SUV and truck sales remain sluggish, automakers may increase discounts and incentives.
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