U.S. light-vehicle sales dropped 1.1% in February after sales of SUVs and trucks couldn't offset the drop in passenger-car demand. Despite the small year-over-year decline, the industry's seasonally adjusted annual sales rate (SAAR) remained strong at 17.57 million, which was essentially in line with analysts' forecasts and last year's record pace. One Detroit automaker posted a solid February while two others struggled in different ways. Here are highlights from all three: Ford (NYSE:F), General Motors (NYSE:GM), and Fiat Chrysler (NYSE:FCAU).
Ford: 208,440 units, 4% decline
During a historically weaker month, Ford's sales dropped 4% and checked in roughly a couple of hundred units below Edmunds' forecast. Ford's retail sales tumbled 3% while fleet sales fell 5%. Segmentwise, Ford-brand car sales plunged 26% driven by unusually weak Fusion sales, which dropped 35%, and Focus sales, which decreased 32%.
On the flip side, Ford's SUVs was able to post a 6% gain and offset some of the automaker's overall sales weakness in February. The SUV sales gain was led by Ford Escape, which posted a 16% sales jump for a February record of 27,637 units. Not to be outdone, Ford's bread-and-butter product, the F-Series full-size truck, posted a sales increase of 9% to nearly 66,000 units.
Furthermore, thanks to strong consumer demand for premium trim versions of the Super Duty pickups and the all-new F-150 Raptor the F-Series' average transaction prices increased by a staggering $3,600 in February. That, in turn, helped drive Ford's overall average transaction prices by $1,900 per vehicle.
One thing for investors to watch going forward is Ford's fleet sales as a percentage of total sales. The company generated 35.4% of its total sales during February from fleet segments, which is much higher than General Motors' 20.5% and Fiat Chrysler Automobiles' 27%.
General Motors: 237,388 units, 4% increase
GM also posted a retail sales gain of 5%, which equated to a market share of 17.7%, a 70-basis-point improvement over the prior year. Looking at GM's four brands, Chevrolet and GMC led the charge with respective sales gains of 3.4% and 17.2%, while Buick and Cadillac posted respective declines of 9.4% and 8.6%.
Two of GM's most important products, the Chevrolet Silverado and GMC Sierra, recorded an impressive February with sales gains of 17.1% and 15.9%, respectively. However, part of the driving force was a large jump in incentive spending by General Motors, according to J.D. Power data made available to The Motley Fool. The data shows the incentive spending for the Silverado and Sierra moved 56.2% and 82.3% higher year over year to $6,996 and $5,315 per unit, respectively. The F-Series, on the other hand, posted a 9.2% drop in year-over-year spending, down to $3,783 per unit.
While incentive spending is being ramped up, at least for now, at General Motors, its average transaction prices are increasing as well. GM's average transaction prices jumped $570 per unit to $34,900, a February record.
"Looking ahead, we will stay focused on strengthening our brands, growing retail sales and share, reducing daily rental deliveries and maintaining our operating discipline," said Kurt McNeil, U.S. vice president of sales operations, in a press release. "Our strong small business deliveries are a clear sign of growing confidence in the economy."
Fiat Chrysler Automobiles: 168,326 units, 10% decline
FCA posted a rougher-than-expected February with a 10% total sales slump compared to the prior year driven in large part to a decrease in fleet sales. FCA's fleet sales during February tumbled 26% while its retail sales were down a less drastic 3%. Despite the significant fall in total fleet sales last month, the segment still generated roughly 27% of the company's total sales.
Looking at FCA's brands, Jeep checked in with another disappointing month despite its top-selling product, the Grand Cherokee, recording an 11% sales gain to 18,925 units. The overall brand, however, posted a 15% dive, which was the brand's six consecutive month of year-over-year sales declines -- a recent trend after years of double-digit growth.
Jeep wasn't FCA's only struggling brand last month as Chrysler and Dodge posted respective sales declines of 28% and 7%. A bright spot amid a weak month was the Ram brand, which posted a 4% sales gain driven by its Ram pickup's 5% sales increase.
The most concerning issue facing major automakers is the balancing act between supply and demand at a time when passenger-car demand has plunged and total new-vehicle sales are peaking. "Inventory is starting to swell, which is concerning considering that we're still months away from the peak summer selling season. Days to turn has reached its highest level since July of 2009, and new vehicle inventory was up 9 percent year-over-year in February," said Edmunds analyst Jessica Caldwell in a press release.
Going forward, investors of major automakers will need to keep an eye on inventory levels, incentive spending, and average transaction prices. Those who find the right balance without sacrificing market share will continue to post solid quarterly bottom-line results. On the bright side, industry analysts remain slightly optimistic about sales moving forward despite February's slight slowdown.