February Auto Sales Rise; Inventory Higher, But Still Thin

Thanks to better availability of new vehicles, forecasters expect around a 5% gain in U.S. new-vehicle sales in February, vs. February 2022.

February would be the seventh month in a row that new-vehicle sales are modestly higher than the same month a year ago, according to analysts for S&P Global Mobility.

For the month, that would be U.S. new-vehicle sales of about 1.1 million car and trucks combined, says S&P Global Mobility.

Separately, Cox Automotive reports a similar February auto sales forecast, which by their reckoning would be up about 4% vs. February 2022.

Cox Automotive said last month the U.S. industry finished 2022 with new-vehicle inventory of about 1.8 million cars and trucks. That’s 66% higher than a year ago, which sounds like a lot, but it’s but still far below around 3.5 million, at the end of 2019.

Analysts blame plant shutdowns in the early part of the pandemic, followed by supply-chain problems, especially a lack of computer chips. The computer chip shortage remains in 2023, but not as severe.

Automakers that report monthly sales are due to report February sales on March 1, according to Autodata Corp.

The positive monthly sales trend is an encouraging sign for auto sales and for continued consumer demand.

When new-vehicle supplies were even lower, the auto industry pretty much took consumer demand for granted, and cut back drastically on discounts. As new-vehicle supply has improved, the auto industry has begun to fret about how strong and how long consumer demand will continue.

New-vehicle prices remain high by historical standards. There’s also a lot of concern around higher interest rates and the U.S. economy in general. So within the auto industry, there’s a lot of concern about consumer demand.

The expected February improvement is about in line with expectations for the full year. For all of 2023, S&P Global Mobility forecasts sales volume of 14.8 million, up 7% vs. 2022.