February sales are expected to show a relatively strong vehicle market in the U.S., though slowing from January's robust post-holidays pace.
The seasonally adjusted annual rate (SAAR) of sales this month is forecast by Cox Automotive to be near 16.3 million, down from January's 16.6 million level and below last year's 16.8 million. However, given ongoing pandemic turmoil and related job losses, coupled with the big freeze in Texas, results could have been much worse.
February is normally one of the slowest sales months in a given year, as many consumers pull back in spending following the year-end shopping season, and adverse winter weather often suppresses vehicle shopping in many parts of the country.
This year, weather will play a bigger-than-normal role, as the deep freeze that impacted markets as far south as Houston disrupted millions of lives and businesses for days and likely reduced vehicle purchases as well.
According to Charlie Chesbrough, senior economist at Cox Automotive: "Texas accounts for nearly one out of every 11 vehicles sold, so the short-term impact on sales from this event will be felt. However, it's likely only a blip in the overall sales picture, as sales are expected to recover for the quarter."
For the U.S., sales volume is expected to fall more than 9% from February 2020, which seems like a large decline. However, there are two fewer selling days this month compared to last year, so a decline is expected. When seasonally adjusted, U.S. auto sales are forecast to be down around 3% year over year.
February 2020 was a milestone month for auto sales: The last full month of sales before COVID-19 struck the country, delivered a significant blow to the economy and severely impacted the vehicle market.
The auto market has bounced back, though, and for vehicle sales to be down just slightly this February is a pleasant surprise for all industry observers.
Key obstacles remain to a full market recovery, with tighter inventories, slowing economic recovery and varied vaccine distribution all potential disruptions. However, at this point in 2021, none of these issues seem to be significantly holding back the market.
A February sales pace of 16.3 million keeps the market on course for a strong recovery from 2020. The Cox Automotive full-year forecast is for...