US new vehicle sales forecast to rise 8.1% in February 2016
Analysts expect US light-vehicle sales to reach 1.36 million units in February 2016, with SUVs continuing to outpace cars and the annualised rate hitting its highest level since 2000.
US new vehicle sales are forecast to climb 8.1% year-on-year in February 2016, according to projections from J.D. Power and LMC Automotive. Analysts expect 1,357,800 light vehicles to be sold this month, up from 1,255,769 in February 2015.
The seasonally adjusted annualised rate (SAAR) is projected at 17.7 million units for February, a sharp increase from 16.4 million a year earlier. This would mark the highest February SAAR since 2000, when the market nearly reached 19 million. The forecast points to continued strong demand, though some of the year-on-year growth reflects the impact of severe weather that dampened sales in key regions last February.
SUVs drive growth, car share hits record low
The US market continues to shift towards SUVs and crossovers, with demand for these vehicles expected to outpace traditional passenger cars for the full year. In February, compact cars are forecast to post the highest retail sales in the industry for the second month running, aided by incentives on outgoing models and interest in new or redesigned vehicles. However, this uptick has not reversed the broader decline in car market share, which is set to fall to 42%—the lowest for February on record.
High incentives on outgoing compact car models and launches of new versions are supporting retail volumes in that segment. Nevertheless, the broader trend remains clear: SUVs and crossovers are capturing a growing proportion of US sales, a pattern also seen in other major markets such as Europe, where SUVs have driven double-digit growth in recent months (/car-sales-in-europe-up-11-in-august-due-to-suvs).
Annualised rate at 16-year high
While the projected February SAAR of 17.7 million units is robust, analysts note it is still below the peak monthly rates seen in late 2015. The retail SAAR is expected to reach 13.9 million, down from 15.3 million in September but well above year-ago levels. The strong showing in February is partly due to a weak comparison with 2015, when sales were disrupted by adverse weather in several regions.
The continued strength in US new vehicle sales reflects a broader global pattern of robust demand in key markets, with China also forecasting double-digit growth in recent years (/china-car-sales-expected-to-climb-20-in-2014). For US dealers and manufacturers, the February figures suggest a positive start to 2016, with SUVs and crossovers leading the charge.
