What Drove February Sales?
It is no secret that February was a successful sales month for the automotive industry, though some experts are still questioning why.
Hybrid car sales in particular were up, especially for Toyota who has now surpassed 3 million units sold worldwide on their Prius models. Modest but still high numbers were reported from Ford and Honda, even with Honda phasing out their current Civic Hybrid model to prepare for the revamped 2012 version.
Auto Observer had an interesting graphic of where the manufacturers fell for February sales on hybrid models.
What is interesting about hybrids having a comeback is that they are mostly immune to the main speculations on why consumers flooded back to the market in February – growth in the economy and better incentives.
Rising gas prices definitely had something to do with a desire for smaller more economical vehicles. It was only recently that gas prices began to surge, but the steady increase has been ongoing for some time and may have had some contribution to higher hybrid sales.
In a recent Kelley Blue Book survey, four out of five consumers said that gas prices were influencing their vehicle choices when purchasing, but although prices clearly influenced some people in February, “most car buyers won’t make dramatic changes until gas prices pass $4 a gallon nationally”, said Mike Jackson, CEO of AutoNation.
Pure electric model car sales were down in contrast to the increased demand for hybrids. Saving money seems to be the key between hybrid success and electric model failure:
“The Prius has the advantage of a price comparable to gas-powered cars. Most electric car models cost more than gas-powered cars of the same size and passenger capacity. There are also concerns about how far an electric car will go without a charge.”
See full article from DailyFinance
InsuranceCorner reported that Chevrolet didn’t even hit 300 Volt models sold in February, and Nissan only sold about 67 of the electric Leaf.
As Toyota seems to be the winner by a large percentage for gas-friendly vehicle sales, and partially to offset US negativity after Toyota recalls, the company has ‘going Green’ as part of its international ongoing goals.
MSNBC and other sources have said that the truth of the current ‘gas crisis’ is that the US has plenty of oil, and loses very little by being cut off from Libya and the current events happening in that region. Gas prices are rising more out of fear, the threat that unrest could spread to Saudi Arabia where oil availability would more directly affect us. Even then, the US has more than enough oil reserves for such an emergency.
Additional reasons for high February sales may or may not have anything to do with a demand for hybrid and more economical models. Better incentives was certainly a factor – less money down, more trade in and lease pull-ahead options, the coveted 0% financing on more vehicles, etc. – but a better understanding of technology had a hand in February success as well.
“Automakers say dealers have sharpened use of new technology for customer relations — replacing or supplementing mailings with quick-response media such as texting, e-mails, Facebook and Twitter.”
There is also additional credit assistance, something that has prevented many consumers from even being able to consider purchasing a vehicle in the past. A 700 FICO score used to be the magic number, but people with a score of 650 are now able to get three year leases. It’s a more forgiving market with credit pressures lessening, and dealers were quick to jump on that trend in February to sell more vehicles.
Gas prices in no way negatively affected February sales, but whether or not the oil situation will improve or not, and how that might affect future consumer demands remains to be seen.