February Sales Rise; GM Hikes Spiffs, Toyota Falters
By Michelle Krebs February 25, 2011
February vehicle sales rose from a year ago and from January, pushing the annualized sales rate to 12.64 million vehicles, according to Edmunds.com's forecast. The month's themes included General Motors' hike of incentives well beyond its competitors' levels, and Toyota continuing to falter with a dip in market share. Vehicle sales, both fleet and retail, are expected to total approximately 937,000 units, a 20.1-percent increase from February 2010 and a 14.4-percent increase, according to Edmunds.com.
That would put February's Seasonally Adjusted Annualized Rate (SAAR) of sales at 12.64 million vehicles -- its highest level since the Cash for Clunkers-fueled August 2009 and the fifth consecutive month of the SAAR exceeding 12 million vehicle sales. February's SAAR would be up from 12.54 in January and 10.5 million in February 2010. Automakers will report sales on Tuesday, March 1.
Edmunds.com estimates fleet sales represented 21 percent of February's total sales, up from 19 percent of January sales. Looking solely at retail sales, retail sales are expected to be approximately 743,000 units.That would put the retail SAAR at 10.1 million, flat with January. “February started slow, but it gained some momentum over President’s Day weekend,” said Edmunds.com Senior Analyst Jessica Caldwell.
GM Juices Spiffs
Generally, automakers reduced their incentive spending in February compared with a year ago and even January. In total, average automaker incentives were about $2,530 for every vehicle sold in February, down $31, or 1.2 percent, from January, and down $127, or 4.8 percent, from February 2010, according to Edmunds.com estimates. Four of the Big 6 automakers reduced February incentive spending from a year ago and January. The exceptions were General Motors and Nissan.
GM clearly is making a grab to maintain market share. It towered above its competitors in February incentive spending, which Edmunds.com estimates led the industry with a per-vehicle spend estimated at $3,857 in February, up from January and up significantly from February a year ago. As a result, Edmunds.com estimates GM will hike market share to 20.7 percent in February, up a couple of percentage points from a year ago but still down from January.
GM's boost in incentive spending was readily noticed by competitors, with Hyundai Motor America CEO John Krafcik suggesting the Detroit automaker was igniting a price war. Other automakers have not followed in lockstep, however, indicating no price war -- or even a skirmish -- is ongoing, noted Edmunds.com Analyst Ivan Drury. Rather, GM clearly is trying to hold onto market share.
Still No Toyota Rebound
In contrast, Toyota’s market share is expected to fall to its lowest level since its issues with unintended acceleration reached fever pitch at this time last year. The share decline comes despite the fact that the federal government announced its nearly year-long investigation, which included NASA rocket scientists, showed no electronic flaws were to blame in the automaker's unintended acceleration cases.
But Toyota's woes cannot be blamed entirely on last year's quality and recall fiascos. Rather the automaker is suffering a drought of new models, a situation it vows to rectify this year with a host of new product launches. Commented Edmunds.com's Caldwell: "Toyota can’t start rolling out new products fast enough.”
Toyota's continued falter, which prompted a 39-percent decline in its last quarterly earnings, is leaving the door open to other automakers to gain. Notably, Ford, which took over the No. 2 sales spot from Toyota in 2010, is expected to have another healthy sales lead over Toyota in February. And Nissan too is gaining at Toyota's expense.
Company by Company
The combined monthly U.S. market share for Chrysler, Ford and GM is estimated to be 46.2 percent in February, Edmunds.com forecasts, from 47.2 percent in February 2010 but up from 45.9 percent in January. On a company by company basis, Edmunds.com predicts the following sales performance for the Big 6 automakers:
GM will sell 193,500 vehicles, up 36.7 percent compared to February 2010 and up 8.4 percent from January, for a market share of 20.7 percent, up from 18.1 percent in February 2010 but down from 21.8 percent in January 2011.
Ford will stay well ahead of Toyota for the No. 2 spot it regained in 2010 by selling 151,900 vehicles in February, up 7 percent from February 2010 and up 19.7 percent from January, for a market share of 16.2 percent, down from 18.2 percent in February 2010 but up from 15.5 percent in January.Toyota will sell 128,800 vehicles, up 28.8 percent from February 2010 when the Japanese automaker was in the thick of its safety recalls and up 11.2 percent from January. Toyota's market share is expected to be 13.7 percent in February, up from 12.8 percent in February 2010 but down from 14.1 percent in January.
Honda will sell 93,800 vehicles, up 16.3 percent from February 2010 and up 23 percent from January, for a market share of 10 percent, down from 10.3 percent in February 2010 but up from 9.3 percent in January.
Nissan will sell 88,900 vehicles, up 26.6 percent from February 2010 and up 23.7 percent from January for a market share of 9.5 percent, up from 9.0 percent in February 2010 and up from 8.8 percent in January.
Chrysler will sell 87,600 vehicles, up 3.7 percent from February 2010 and up 24.9 percent from January for a market share of 9.3 percent, down from 10.8 percent in February 2010 but up from 8.6 percent as in January.
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