Polar vortex chills January U.S. auto sales

Fri Jan 31, 2014 3:50pm EST
 
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By Ben Klayman

DETROIT (Reuters) - Snow and bone-chilling weather likely hurt U.S. auto sales in January but should not prevent the industry from continuing its rebound, analysts said.

The bad weather in large parts of the country, including the East Coast and Midwest, was a repeat of what happened in December, when industry sales fell short of expectations.

Economists polled by Thomson Reuters expect the industry's annual selling rate in January to finish at 15.65 million vehicles when automakers report their results on Monday. However, the inclement weather led Buckingham Research analyst Joseph Amaturo to predict a rate of 15.3 million vehicles.

In January 2013, the industry's annual sales rate was 15.23 million vehicles.

"It's the winter blues really," said Jeff Schuster, senior vice president of forecasting at research firm LMC Automotive. "The country has been hit by bad weather and in January we saw it at the beginning of the month and now we're closing with weather issues."

The bad weather's impact was illustrated by the changing outlook at LMC. The research firm initially forecast a sales increase in January of 1.2 percent and an annual sales rate of 15.9 million vehicles, but later cut that to a decline of almost 1 percent and an annual rate of 15.5 million.

Most analysts who closely follow the industry expect January sales on a percentage basis to finish close to flat compared with last year, with some seeing a slight increase and others a small decline.

Morgan Stanley analyst Adam Jonas's uncle, an auto dealer in Ohio, bemoaned the weather's detrimental effect. "Maybe people want to buy cars, but they don't want to lose their fingers to frostbite for the privilege," the uncle said, according to a recent Jonas research note.   Continued...

 
The 2014 Honda Accord Hybrid, which was named "Green Car of the Year", is pictured at the Los Angeles Auto Show in Los Angeles, California, November 21, 2013. REUTERS/Lucy Nicholson