02 March 2011

February automotive sales jump over 20%

February was marked one of the strongest months for auto sales in the past year. Aggregated data from major automakers formed industry estimates that February sales figures jumped 20 percent overall. That's almost 1 million more vehicles compared to last year.

"The consumer is back to the showrooms," said an analyst with Barclays Capital.

Big three car maker, General Motors, said that compared to 2010, U.S. sales for February increased nearly 46 percent to 207,028 vehicles.

General Motors added that its retail sales for the month were even better. According to the automaker, that is the highest year-over-year increase in the retail market in the company's history (a 70 percent growth over February 2010.)

"Our plan was to get off to a quick start this year, and we did just that," said GM's sales chief Don Johnson. "Having the right vehicles in inventory, combined with aggressive advertising and targeted consumer marketing, has been the key to our success in the first two months of this year."

The automaker's spike in sales was largely a result of "very large incentives offered by the manufacturer for the second month in a row," the analyst at Barclays Capital wrote in a report. He added that General Motors was offering better incentive to buy while the company's management "reiterated its commitment to keep its incentives in line with the industry for the year."

According to an analyst at TrueCar.com, the industry incentive averages were the lowest for a February since 2007.

Ford, another big three automaker, said its overall sales in February increased 14 percent to 156,626 vehicles compared to last year's February. Economy cars for Ford, such as the Focus and Fiesta, more than double. The company claimed high gas prices could be a result of the small vehicle sales.

In addition, low auto transport rates have helped minimize shipping costs for major industry players. This has helped dealerships carry more inventory for buyers to consider.

Toyota reported sales in February 42 percent (141,846 vehicles) better over last year. Barclays Capital analysts warned that the major spike in sales for Toyota was notably deceptive. The company suffered sales due to last year's safety issues which made February's year-over-year comparison appear over-inflated.

Officials at Toyota were still happy with the numbers: "After two months of improving sales, we feel good about the way 2011 has started," said a Toyota vice president.

Nissan North America's sales for the month rose almost 32 percent to 92,370 vehicles. This set a new record for February sales in the U.S. for the company.

Michigan's Chrysler Group reported a 13 percent increase in February sales (95,102 vehicles.)

This month's positive reports from the automotive market impact the bottom line for many other sectors tied to the industry. Auto transport companies, insurance providers, and select government organizations are also seeing sales improvements.

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