U.S. auto sales had another tough run in February. While Fiat Chrysler (NASDAQOTH:FIATY) and Nissan (NASDAQOTH:NSANY) managed to once again post year-over-year increases, the biggest players -- General Motors (NYSE:GM), Ford (NYSE:F), and Toyota (NYSE:TM) -- all saw sales decline, as rough winter weather disrupted shipments and kept consumers away from dealers.
Ford officials said on Monday that there were some reasons for optimism in the generally grim numbers, though -- and they, like many industry observers, expect spring weather to bring a big uptick in new-vehicle sales.
A harsh winter disrupted Ford's sales -- and production, too
Ford said on Monday that its U.S. sales in February were down 6%, a decline that the company attributed largely to severe winter weather that disrupted some parts shipments and kept buyers away from dealers in many parts of the country.
Ford said that its retail sales were down 4%, but that its F-Series trucks and Lincoln luxury brand posted solid gains. Fleet sales were down 10%, as Ford said that about 10,000 vehicles that had been scheduled for delivery to fleet customers in February -- mostly Fusions and Focuses -- will now be delivered in March.
Those delayed deliveries made for some grim-looking numbers. Fusion sales were down 14.3% versus the year-ago months -- but Ford said that the drop, about 4,000 cars' worth, was due in part to the decision to reschedule some fleet deliveries after supplies of some parts to Ford's factories were disrupted by the weather in early February. Focus sales suffered from an even bigger decline, for similar reasons.
Ford said that the Fusion's retail market share was about the same as it had been in February 2013. But Ford's sales analyst, Erich Merkle, also said that a larger trend in the marketplace was putting pressure on small and midsize car sales across the industry.
Signs of strength as the market starts to shift
Merkle said that small SUVs as a segment are booming right now. According to his figures, small SUVs represented 18% of total industry-wide U.S. sales in February, up from 14.5% a year ago. Part of the story here is the weather, but part is a demographic shift, Merkle said -- "empty nest" baby boomers are buying more compact SUVs.
Ford is well-represented in the small and midsize SUV segments. Sales of the Edge were up 13.2% in February -- but sales of the Escape were down 4%, in line with Ford's overall retail result. Still, this is a trend that should favor Ford as winter weather fades.
Another trend: The market's favor for luxury cars. Ford's Lincoln brand posted a 36% rise in February, powered by the MKZ sedan -- which was just rolling out a year ago -- and a 8.4% gain for the MKX SUV.
Meanwhile, Ford's pickup sales continue strong -- and without excessive incentives. Sales of the F-Series were up 2.6%, giving the model line its best February result in eight years, Ford said. Meanwhile, incentives held steady at an average of about $4,000 per truck, Ford said -- up about $200 from January, but down about $350 from year-ago levels -- and down about $500 from Ford's per-truck payments last fall.
We've seen signs that General Motors is preparing to ratchet up incentives on its pickups, but Ford says that it will stay with its plan. Any urgency Ford might be feeling to boost its own incentives faded a bit in February: Inventories fell to a 91-day supply, higher than we'd like but considerably lower than the 111-day level we saw at the end of January.
Is it really just the weather holding sales back?
Are U.S. new-vehicle sales in a funk, or is it really just the weather? During a conference call for reporters and analysts on Monday, Ford U.S. sales chief John Felice said that while the sales pace was definitely well down during the first part of the month, it appeared to pick up during the last 10 days or so of February.
Felice said that the pace of sales -- at least, at Ford dealers --as of the end of the month was about what he would have expected of a typical robust February week. He said he was encouraged by that, and expected March's results to look stronger as spring weather began to arrive in the northeast and midwest U.S.
The upshot: A solid performance in a tough month
It's never good to see a sales decline, but for Ford shareholders, there's nothing too alarming here. Ford's pickup sales continue to be strong, without a heavy increase in incentives; the company's retail sales appear to be keeping pace with the market, roughly speaking; and Ford continues to be well-positioned in terms of product to take advantage of ongoing market shifts.
As I said the other day, March's sales numbers will tell us a lot. If sales pick up as the weather improves, as Ford and key industry observers expect -- and if Ford catches up on its fleet deliveries, its numbers at this time next month could look very good indeed.
If not, then it might be time to worry. Stay tuned.
John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.