By Maddy Perkins
In line with analysts’ predictions, warming March temperatures have brought consumers back into auto showrooms. The numbers in Tuesday’s auto reports were slightly better than anticipated, suggesting that the cold winter weather was a significant factor in stalling January and February’s sales.
This is a good sign for the economy as a whole, suggesting that overall, consumer demands may have been delayed by bad weather.
Automakers sold approximately 1.53 million units in March, boosting the seasonally adjusted annualized rate (SAAR) to 16.4 million cars.
That’s the best SAAR rate in close to seven years and well above February’s stalling rate of 15.3 million.
“Yesterday’s report was really consistent with the predicted weather effects. You had a lot of people being literally kept away from stores because they weren’t able to get there,” said Gennadiy Goldberg of TD Securities. “Everyone was putting off purchases because they didn’t want or couldn’t leave home.”
The seasonally adjusted rate of 16.4 million exceeded the industry’s consensus forecast for this month of 15.8 million units. Analysts expect March’s boost in sales will help bring the market closer in line with their overall estimates for the year.
“I think March showed that the consumer – or at least car buying consumers – are still out there who willing to purchase and are optimistic,” said Kevin Tynan, Senior Auto Analyst at Bloomberg. “From tax season and into the Summer selling season, I’d be reasonably optimistic that the trend will lead us back to the SAAR we expected at 16 million unit sales in the coming months.”
General Motor’s solid sales might have come as a surprise in light of the company’s struggle with recalls throughout the month. Sales increased 7 percent from February and 4.1 percent from March 2013.
The nation’s oldest automaker recalled approximately 2.6 million cars after it was revealed that faulty ignition switches in cars sold between 2008 had caused at least twelve deaths. Another 1.3 million units were recalled Monday due to power-steering issues.
Because the recalls aren’t applied to the 2014 family of GM cars currently on sale, consumers were not discouraged.
“I think when we look at these recalls, there is this expectation or thought that we’ll see a downward trajectory in sales,” said Alec Gutierrez, Senior Analyst at Kelley’s Blue Book. “Consumers realize the GM of today is different and the cars are of much better quality.”
Goldberg, of TD Securities, thinks it may be too soon to understand what affect the recalls will have on GM’s sales in the coming months.
“We’re still finding out what the details of how that will affect sales are. Consumers do pay attention to safety,” said Goldberg. “It takes a while for consumers to feel unsafe when it comes to a certain car.”
Winners this month included Chrysler and Nissan. Chrysler’s sales went up 13%. Nissan sales increased by 8%.
Chrysler may have been lucky even amid the dropping temperatures – its numbers were positive throughout January and February. Auto dealer Augie Difeo at White Plains Chrysler Dodge Jeep in White Plains, NY said the cold didn’t scare away too many customers.
“There was some setback in January and February, but March seemed to be a better month across the board,” said Difeo. “There must have been some people with pent-up auto-buying demand. But the overall volume was also up, so there was certainly enough.”
Volkswagen and Honda experienced the industry’s only net losses in March. VW sales went down 2.0 percent for all models except for their Jetta and Passat models. Honda had a loss of 2.6%.