February auto sales data expected to show sustained recovery
U.S. auto sales in February were expected to show a fourth straight month of seasonally adjusted annualized sales above 15 million vehicles for the first time since early 2008, a sign of a sustained recovery after the recession.
Forty-one analysts surveyed by Thomson Reuters forecast on average a 4 percent rise in February sales, to an annualized rate of 15.1 million vehicles. The forecasts ranged from 14.9 million to 15.75 million vehicles, on an annualized basis.
February sales will be reported by automakers in the U.S. market on Friday. Auto sales each month are an early indicator of the strength of consumer spending.
"Car sales are persevering despite economic factors on people's minds like rising gas prices and the implementation of the payroll tax," said Edmunds.com analyst Jessica Caldwell. "Pent-up demand and widespread access to credit are keeping up car sales momentum."
Americans are driving cars that are on average 11 years old, the oldest fleet of cars ever on U.S. roads.
A four-month streak of auto sales above 15 million on an annualized basis has not occurred since a streak of nearly 10 years was snapped in early 2008.
Auto sales began to tank in 2008 and by 2009 hit a 28-year low of 10.4 million vehicles.
The expected 4 percent sales gain for February would be less than that of recent year-on-year increases. Analysts say previous sales gains were outsized due to occurring in an earlier stage of the moderate recovery from the recession.
Consumer confidence picked up much more strongly than expected in February as consumers shrugged off concerns over this year's payroll tax increase, a private sector report showed on Tuesday.
On the bullish side of forecasters, Jesse Toprak of TrueCar.com forecast a 17 percent rise in February sales to an annualized sales rate of 15.7 million vehicles.
Toprak said pent-up demand by small businesses buying full-sized pickup trucks, despite rising gasoline prices, was critical to the rising February sales and will remain a force for strong sales throughout 2013.
The inventory of General Motors Co full-sized pickup trucks will drop to 104 days of supply from the bloated 117 days of supply at the end of January, Barclays forecast.
Pickup truck supply is seen as healthy closer to 80 days of supply or less.
GM's pickup truck inventory levels is another sign that February truck sales were strong, Barclays said.
Incentive spending was down 4 percent in February compared to a year earlier, a key to higher profit margins for the automakers.
Manufacturers offer incentives on retail sales to consumers to move slow-selling models. That increases sales but also cuts into automaker profits.
Honda Motor Co <7267.T> dropped incentive spending 39 percent from the previous February, and Nissan Motor Co <7201.T> spending fell 24 percent, TrueCar said.
Hiking incentive spending 19 percent in February were two brands with the same South Korean corporate parent, Hyundai Motor Co <005380.KS> and Kia Motors Corp <000270.KS>.
(Reporting By Bernie Woodall; Editing by David Gregorio)