Will Sales Start Rising for Ford Motor Company?
Few things worry auto company investors more than a slowdown in the U.S. new-vehicle market. And for good reason: Nearly all of the major global automakers rely on the U.S. for a substantial share of their profits.
Like most of its rivals, Ford posted some decidedly somber sales numbers in the first two months of 2014. Heavy winter weather in many parts of the country kept consumers away from new car dealers. Ford has mostly held its ground, while -- officially, at least -- remaining optimistic that lost sales would be made up once the weather started to improve.
Is that happening? So far, it's hard to tell. As Fool contributor John Rosevear notes in this video, the latest analyst estimates for U.S. auto sales are a mixed bag -- but there's no question they're not as promising as some had hoped.
A transcript of the video is below.
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John Rosevear: Hey Fools, it's John Rosevear, senior auto analyst for Fool.com. It's looking like auto sales turned up a bit in March. We won't have the official numbers until Tuesday, but analysts at edmunds.com have released their forecast, and the word is that sales appear to have picked up, at least somewhat.
New vehicle sales in the U.S. have had a tough time so far this year; numbers were very soft in January and February as severe winter storms in many parts of the country kept consumers away from car dealers. The thinking among analysts, or at least the hope, was that we'd start to see a rebound as the weather got better, as those folks who want or need new cars start to make their way to dealerships.
We may have seen a little of that in March, though in truth, it kind of depends on how you look at it. When we look at auto sales in the U.S., you often hear experts talking about the "SAAR," which stands for seasonally adjusted annualized rate. Basically it's shorthand for, if cars keep selling at this pace, here's how many will get sold this year, so it's an indicator of the rate of new vehicle sales. And this is for what we call "light vehicles," which is cars, SUVs, and pickups -- bigger trucks have a separate category. Edmunds sees the SAAR for March coming in at 15.8 million, that's up from 15.3 million we saw for February.
But the actual year over year increases aren't that big, Edmunds expects overall sales to be up just 1.7% versus March of last year, but that comes with a little asterisk courtesy of the calendar.
We look at what experts call "selling days," when we look at auto sales, that excludes Sundays because many new car dealers are closed on Sundays, and this March will have had 26 selling days versus 27 in March of 2013, so that makes the year over year comparison a little tricky.
But we can still look at relative strength among the automakers, and there are some interesting trends there. Edmunds expects another big jump for Chrysler, or maybe we should start saying Fiat Chrysler Automobiles . They've been up big so far this year even while most of the other guys were posting declines, and Edmunds sees that continuing with an 11.1% increase for them in March.
Edmunds expects Ford, Toyota , Nissan , and General Motors to all post small sales increases, while Honda , Hyundai/Kia, and VW Group will all post declines, they say. Chrysler has been a little more aggressive with pricing and incentives than Ford and certainly GM, though GM stepped it up with a big Chevy truck promotion in March. It'll be interesting to see how pick-up truck sales played out among the Detroit automakers, as those are huge drivers of profits, and this is the end of the first quarter. We'll have much more for you on all of this when the official numbers are released next week. Thanks for watching.
The article Will Sales Start Rising for Ford Motor Company? originally appeared on Fool.com.John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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