Bitter cold put a chill on new car sales nationwide in February, but the low temperatures’ effect was less apparent in the Buffalo Niagara region.
Our car buyers could be a heartier bunch, but a more likely explanation was a carryover effect from the Buffalo Auto Show, when incentives abound to encourage deals. While some area dealers reported a sales drop-off from a year ago, others said their numbers were up.
Ford, General Motors and Toyota reported declines in their national February sales from a year ago, saying the frigid conditions deterred shoppers from visiting showrooms and taking test drives. Nissan and Chrysler reported gains.
Like many parts of the country, the Buffalo Niagara region endured an exceptionally cold February. But it appears the four-day auto show early in the month and its post-show jolt provided something of a counterweight. Figures from the Niagara Frontier Automobile Dealers Association are not yet available, but some dealers reported strong sales. Others said the weather has crimped business.
Paddock Chevrolet several times has been the nation’s top-selling Chevy dealer during February, but this time, the Kenmore dealership’s sales were down 5 percent from the year before, said Duane Paddock, the dealer principal.
“I go back 15 years since we’ve had a winter like this,” Paddock said, pointing to a combination of snow that piled up and persistently low temperatures as factors.
“What it curbed was the ‘want’ sales,” Paddock said. “The ‘need’ purchases were there all month,” such as customers whose leases were up or whose cars were totaled.
Despite the drop-off, Paddock said, he sold about 400 new and used vehicles during the month.
Steve Baldo, who has two area dealerships, said the month started out fairly strong for him before hitting a lull in the middle and picking up steam at the end. He said the weather was a factor. “It’s a little bit easier to put off the decision to jump into the car on a day like that and go car shopping,” he said. Baldo has a Ford store in Niagara Falls and a Chevrolet, Buick and Cadillac dealership in North Collins.
Meanwhile, Towne Automotive Group, which sells multiple brands, had its best February ever, rebounding from a slower-than-usual January, said Frank Downing Jr., the president. He said sales were strong across his franchise lineup, including about a 20 percent increase for Fords. “Every year it seems to really jump post-auto show, this year more than most.”
West Herr Automotive Group, one of the largest dealer groups in the country, said its February sales were up 13 percent from last year.
“The weather was more of a factor for us in January, especially in our Southtowns locations,” said Matt Lasher, West Herr’s marketing director.
“However, this may have created some pent-up demand for February. The Buffalo Auto Show always seems to stimulate the market and, combined with Presidents Day weekend, creates a good environment for buying a car,” he said.
Lasher said West Herr recorded market share gains in “just about every franchise we represent, and we feel very positive about the momentum we have going into March.”
Paul Stasiak, president of the automobile dealers association, said many automakers have indicated they had a strong month here in February. Automakers routinely channel funds into incentives tied to Buffalo Auto Show promotions, aiming to capitalize on the interest the event generates.
Automakers entered 2014 brimming with optimism about U.S. auto sales; some projections called for selling a dazzling 16.5 million units, a level not seen since 2007.
But a sluggish start in January, coupled with the February chill, has raised questions about what this year might actually bring.
Among all automakers, U.S. sales were estimated to have increased 1 percent in February from a year ago, but that was in contrast to an 8 percent increase in February 2013. GM reported a 1 percent decrease last month, and Ford reported a 6 percent decline, while Toyota’s sales were down 4 percent. Nissan’s sales rose 16 percent, and Chrysler’s were up 11 percent, according to Automotive News statistics.
Dealer inventories, especially for the Detroit automakers, have hit their highest level in five years, putting pressure on companies to clear their lots. At the end of January, dealers had an 89-day supply of cars and trucks, according to Ward’s AutoInfoBank. Detroit automakers had the most, with GM at 114 days, followed by Ford at 107 and Chrysler at 105. A 60-day supply of vehicles is considered ideal.
To unload the inventory, automakers are offering more discounts. That means deals for consumers. Incentives are the highest they’ve been in three years, averaging $2,633 per vehicle in February, up more than 5 percent from a year ago, according to TrueCar.
Larry Dominique, executive vice president of TrueCar, said automaker spending on discounts is growing faster than average sales prices, but he predicted that the bargains will wane as the weather gets warmer and customers go shopping again.
“We expect a return to balance once the winter subsides and inventories ease,” he said.
Downing said that while inventories are high now, dealers like himself will be able to draw them down as they enter the prime selling period of March through October. A number of automakers ramped up production, with each anticipating a strong year, he said.
Paddock said he has a supply of about 1,100 new units to sell. He is looking forward to even a modest increase in the temperature.
“We know that it’s going to break, and we know that this isn’t the way it’s going to be for the next 12 months,” he said.
The Associated Press contributed to this report.