The automotive industry's seasonally adjusted annual rate, or SAAR, of vehicle sales is expected came in at 15.2 million in January 2014, as sales dropped 3% compared to last year. While the industry was expected to grow modestly last month, and the results disappointed slightly, keep in mind that January is typically the weakest month of the entire year for light-vehicle sales. Weather appears to have affected sales negatively, causing two of Detroit's Big Three automakers, Ford and General Motors , to stumble last month, while Chrysler surged ahead. Here are the details, and a few things to keep in mind.
Ford: 154,644 units, down 7%
Ford's overall January sales in the U.S. were down 7% and its retail sales of 113,721 declined 5%, compared to last year's results. Ford's three most popular vehicles -- the Fusion, Escape, and F-Series -- posted sales declines of 7.5%, 2.4%, and 0.7%, respectively. However, Ford did note that retail sales improved at a healthy clip in the West, which wasn't affected by winter weather. That should give investors reason to believe that the next couple of months will even out January's performance in the quarter.
Ford's inventory levels were also much higher than usual, at 111 days; however, management said that it feels good about the extra inventory heading into the spring and summer months. Last year, Ford definitely left some market share on the table when its factories weren't able to keep enough supply of fast-selling vehicles; that shouldn't be an issue this year.
Another bright spot for Ford investors was the company's luxury lineup. Lincoln sales posted its best January result in four years, with sales increasing 43% year over year to 5,973 vehicles.
General Motors: 171,486, down 12%
Overall U.S. sales of General Motors vehicles declined 12% to 171,486 vehicles for January, while retail sales posted a 10% decline. Total sales were affected by a 18% decline in fleet deliveries due to the company's planned reduction of rental sales, according to a GM press release.
One highlight was GM's light-duty pickup truck sales mix. In the fourth quarter, half of its truck sales were premium models that transacted at prices exceeding $40,000. That compares favorably to about one-third in 2013 and 20% in 2012, and the sales mix continued to improve in January. Despite an overall decline, retail sales of GM's Chevrolet cars improved 8%, led by the Sonic, Malibu, Impala, and Corvette.
Chrysler: 127,183, up 8%
Chrysler's overall January U.S. sales increased 8% compared to last year for the company's best January sales figure since 2008. The increase was driven by its Jeep and Ram Truck brands which were up 38% and 22%, respectively. Parent Fiat also posted a 29% increase in sales, which was the brand's best January sales ever.
"The bad weather only seemed to affect our competitors' stores as we had a great January with sales up 8 percent and achieved our 46th consecutive month of year over year sales increases," Reid Bigland, head of U.S. sales for Chrysler, said in a press release.
When it comes to profits for Detroit's Big Three automakers, trucks haul the biggest margins. The Ram Truck's 22% sales increase is a huge deal compared to Ford's F-Series sales, which were flat, and General Motors' Silverado and Sierra, which posted declines of 18% and 13%, respectively.
TrueCar.com estimates that the average transaction price in the U.S. market for light vehicles was $30,934 in January, an $804 improvement from last year. Also, industry incentive spending was down 3% in January from the year-ago period. This is a good sign for the industry; if the trend continues it should lead to a more profitable first quarter.
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The article 2 Detroit Automakers Stumbled in January, but 1 Surged Ahead originally appeared on Fool.com.Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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