Total sales of motor vehicles were little changed at 16.8 million units (SAAR) in February after 16.9 in January. Sales of passenger cars totaled 4.268 million units after 4.312 in the prior month, and sales of light trucks — which includes SUVs, crossovers, and minivans — were at 12.565 million units after 12.610 million. Consumer spending on motor vehicles should not be much changed in the retail sales report for February at 8:30 ET on Tuesday, March 17.
Sales of light trucks maintained their record 75% share of all vehicles sold for a second month. The consumer preference for light trucks is well-entrenched due to their versatility and more car-like appointments and general quality improvements that manufacturers have concentrated on. The current low in gasoline prices is also persuasive for the category.
Sales of imported cars and trucks totaled 3.8 million units in February while domestically produced vehicles were at 13.1 million. It is possible that sales of imported cars and trucks may be lower in the next few months if COVID-19 quarantines in Japan affects construction and export of vehicles and parts, while delays in getting parts from China could reduce production of domestic vehicles. In the short-term, it could mean a drawdown in available inventories if consumers decide not to wait for orders to be filled and opt for an vehicle already on the lot.
Sales of heavy trucks rose to 462,000 SAAR in February after 438,000 in January. For the first quarter to-date, the level averaged 450,000 compared to the monthly average of 487,000 in the fourth quarter. Business investment in this sort of equipment is lagging and won’t be a positive for GDP growth in the first quarter.
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