Auto sales fall as weather pounds nation

By TOM KRISHER

Associated Press

March is the month to watch for the U.S. auto industry.

Sales have been slower than expected so far this year. As the spring thaw begins, automakers will see if the slowdown was due to historic cold temperatures and snowfall — as many believe — or if there are deeper reasons for sagging demand.

“March will give us a sense of how real the recovery is going to be this year,” said Alec Gutierrez, a senior analyst for Kelley Blue Book.

Automakers entered 2014 expecting to sell more than 16 million cars and trucks for the first time since the recession. But so far, sales are on pace to hit around 15 million, which would be 600,000 less than last year. But Gutierrez believes sales will recover reach 16.3 million for the year. The industry sold 16.1 million vehicles in 2007.

“We think there is still plenty of time left this year for sales to rebound and kind of get us back on that pace,” he said.

On Monday, General Motors, Ford and Toyota all reported U.S. sales declines for February. The country’s top three automakers by sales said the month started slowly but sales began to recover in the second half. If that momentum continues into March, fears of a broader sales slowdown may prove to be unfounded.

Industry analysts expect overall sales to rise about 1 percent for the month, a slow pace compared with the 8 percent increase for all of last year.

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 General Motors at 114 days, followed by Ford at 107 and Chrysler at 105. A 60-day supply of vehicles is considered ideal.

Chrysler and Nissan were able to notch double-digit gains, but discounted some key models to get there. That points to another potential problem if automakers have to offer steeper discounts to shrink their inventories.

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