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2 Detroit Automakers Stumbled in January, but 1 Surged Ahead

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 (NYSE: F  ) and General Motors (NYSE: GM  ) , 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.

Bottom line 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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Read/Post Comments (6) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 03, 2014, at 3:53 PM, AmericanFirst wrote:

    Per Reuters / KBB, Jan. avg transaction prices - Ford - F150 ($40,672), GM - Silverado ($40,575), Dodge - Ram 1500 ($37,253).

  • Report this Comment On February 03, 2014, at 4:44 PM, 50yardline wrote:

    At close of business 02-03-14:

    Ford Motor Co. (F) -NYSE

    $14.55 -0.41(-2.74%) 4:00PM EST

    General Motors Company (GM) -NYSE

    $35.25 -0.83(-2.30%) 4:02PM EST

    Fiat S.p.A. (FIATY) -Other OTC

    $9.64 -0.34(-3.41%) 3:59PM EST

    They all got hammered today, so the sales figures don't really mean a lot to the market. Fiat/Chrysler got hammered the most, even with good figures.

  • Report this Comment On February 03, 2014, at 6:48 PM, mcFoolish wrote:

    Chrysler is not a Detroit car company. It is based in Italy.

  • Report this Comment On February 03, 2014, at 8:33 PM, gjsuhr wrote:

    In the middle of a very snowy winter, I'd rather be selling Jeeps and 4 wheel drive trucks than most anything else.

  • Report this Comment On February 04, 2014, at 6:26 AM, Stangman123 wrote:

    I do not know where everyone is from, but here in Ohio the weather was not suitable to look for purchasing a car. Also, if I did not have to look for a car, even though I needed one, I sure would not be out looking in January, and especially this January. Does anything think that had to do with it elsewhere?

  • Report this Comment On February 04, 2014, at 11:20 AM, cityperson wrote:

    Wait till the weather clears and the auto makers will still be stumbling, with our slow economy.

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Daniel Miller

As a Motley Fool Industrial Specialist, I use my marketing and business background in the automotive industry to evaluate major automakers and other large industrial corporations. Follow me on twitter for tweets about stocks, cars, sports, and anything I find amusing.

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