Last year was a banner year for the auto sector: Total sales hit 15.6 million, the highest level since prior to the recession, and a 7.6% year-over-year gain. Not only did total sales rise, but every major automaker saw their respective sales improve compared to the previous year.
This year, however, hasn't presented the auto sector with the best set of circumstances. The polar vortex wrapped about half the nation in record cold and snow for much of January and February, hampering sales for a number of domestic and overseas automakers, and stymieing sales of select models on car lots across much of North America.
Of course, not all of the top-selling vehicles in the U.S. are struggling. Trucks, such as Ford's (NYSE:F) F-Series pickups have thrived in this harsh driving environment. On April 1, Ford noted that sales of its F-Series crossed the 70,000 unit threshold in March, the fourth month the automaker has done so in the past seven years.
Nissan has also seen a big revival in the U.S. Sales of its Rogue crossover are up a whopping 47.1% year to date, and the Sentra sales are up a respectable 23.6%.
Overall, sales of eight of the 20 best-selling vehicles in March are up year to date; another eight are down by modest single-digit amounts. This means, however, that March sales of four of the top-selling vehicles are currently down by double-digit amounts year to date.
Let's have a closer look at what might be dragging down these best-sellers to see if it's a temporary bump that'll even itself out in short order, or if there could be something more worrisome going on behind the scenes for these auto manufacturers.
Overall, sales for Honda Motor (NYSE:HMC) dipped 2% in March, but they did show signs of an ongoing recovery with total unit sales of 133,318 jumping 32% from February. The one standout, albeit to the downside, is that sales for its Accord sedan are down 13.6% year to date.
Although Accord still ranked as the seventh-best-selling car in the U.S. in March with 32,616 units sold, total sales of the vehicle fell close to 11% from last March. Honda blamed the weather for the shortfall in a press release, but also pointed to price incentive deals from competitors as a reason why Accord has struggled to move off dealer lots. Investors needn't worry because it looks like the effect of a few months of predominantly weather-induced weakness following a rise in Accord sales by a healthy 10.5% last year in the U.S. Also, consider that the Accord was fully redesigned in 2013, and it'd be unlikely that consumers have suddenly lost faith in the highly dependable and fuel-efficient flagship sedan.
Expect this dip to be temporary, but investors will still want to monitor sales of the Accord closely into the summer.
Of the 20 best-selling vehicles in March, none have taken a bigger swan dive year to date than Ford's compact vehicle, the Focus. Despite logging nearly 24,000 units in March, sales fell year-over-year by 3.8% and are down better than 16% year to date.
You can partially blame the weather for its weaker sales, but the bigger issue is one that Foolish senior auto analyst John Rosevear touched on in February -- a lack of a major redesign. As John noted, the Focus hasn't had a major redesign in some time, while both of its primary competitors, the Honda Civic and Toyota Corolla have much fresher styling. Ford has been focused on developing a number of newer models, such as the Fusion, and have left the Focus on the backburner for the time being, hampering its sales.
One thing to keep in mind, as John also pointed out, is that a redesigned Focus is on the horizon for 2015. It's probably only a matter of time before sales pick up again as it, too, has been a model of reliability, fuel-efficiency, and cost-effective pricing in the U.S. for Ford. Unfortunately, its age has finally caught up a bit and it's unlikely to be a big growth story until its aforementioned redesign is officially unveiled next week at the New York International Auto Show.
Coming in 18th out of 20 in the sales-affected, best-selling vehicles is Ford's SUV, the Explorer, which sold 19,334 units sold in March, a 4% improvement from the year-ago period but down 10% on the dot year to date.
I wish I could say that the culprit here was the weather, but trucks and SUVs are actually go-to vehicles that sell better in inclement weather, so that's not the case. In actuality, rising fuel prices appear to be dooming some midsize and large SUVs as consumers trade down to more fuel-efficient small SUVs like the Honda CR-V.
Over the past two months gas prices have risen by about $0.30 per gallon, putting the brakes to any would-be surge in midsize and large SUV sales. It's also disappointing because in November gas prices had been nudged to their lowest national average since 2010, giving automakers hope that high-margin SUVs would once again be viewed in good light by consumers.
However, don't feel too bad for Ford -- its crossover vehicle the Edge and its compact SUV the Escape are both delivering impressive fuel economy with the EcoBoost engine available on both models. Ford's EcoBoost engines utilize superchargers to give drivers power when they need it, but also allows the engine to sip rather than guzzle gasoline when that power isn't needed to improve fuel efficiency. In other words, Explorer sales may continue to struggle unless gas prices drop, but Ford has other tricks up its sleeve to keep customers loyal to the brand.
Lastly, sales of the Hyundai (NASDAQOTH:HYMTF) Sonata, in spite of a 6.7% increase in March year over year that led to 19,248 units being sold, are down almost 15% year to date.
Back in early March, Bob Pradzinski, vice president of sales for Hyundai, placed the blame squarely on the weather: "I don't like to make excuses, but the awful weather we saw across the country really hurt traffic to our dealerships and ultimately kept our sales at a pace well below what we were expecting." Sales did improve in March, but they're well off their typical pace.
The bigger concern for Hyundai appears to be the need for a successful introduction of its newly redesigned Sonata in 2015. Like the Ford Focus, Hyundai's Sonata has gone far too long without a major overhaul; it was last redesigned in 2009! For cost-conscious consumers looking for sleek styling and improved fuel-efficiency, the Sonata simply hasn't offered the same flare as its competitors.
The good news is that Hyundai did reveal the all-new Sonata in South Korea just three weeks ago and the sneak peek of the new model demonstrated a number of new conveniences and luxury features designed to attract cost-conscious luxury seekers. The official unveiling in the United States will come at the New York International Auto Show next week, and it's difficult to imagine the Sonata falling flat after being a staple of reliability for so many years.