Home Auto January auto sales better than expected; supply concern grows

January auto sales better than expected; supply concern grows

Most automakers reporting U.S. sales for January enjoyed solid momentum coming out of a strong holiday season.

Five of the seven companies that posted results tallied gains, while only Ford Motor Co. and American Honda were down. Overall sales for the seven fell 2.1 percent in a month with one less selling day than January 2020.

Among the winners and losers, Kia sales jumped 11 percent on hot crossovers while Ford dropped 8.4 percent as it discontinued car models.

For the industry as a whole, analysts estimated the decline at 3 to 5 percent last month, with retail sales higher year over year and fleet sales still sharply lower but starting to rebound. Many automakers, such as General Motors and Nissan, report sales quarterly.

Forecasters saw reasons for optimism. Demand has remained strong through the worst of the pandemic, and the vaccine rollout is likely to support the trend. On the other hand, already-tight inventories are a growing concern as a global semiconductor shortage now idles some plants.

“It appears that some of the sales momentum from December has carried over into the new year, which is somewhat surprising given that the industry has faced ongoing inventory shortages,” said Jessica Caldwell, director of insights at Edmunds.

Deutsche Bank put the annual selling rate at 16.7 million for January, “well above our 16.2 million estimate and up nicely from December’s 16.4 million,” said Emmanuel Rosner, lead U.S. auto analyst for the bank. Sales for the new year areprojected at 15.8 million, Rosen added, “with solid upside potential from new government infrastructure spending or EV incentives.”

Read More: Auto News



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