January U.S. auto sales were slightly better than the slow growth investors and analysts were expecting.
Autodata reported a 0.3% decline for the month with 1.15 million vehicles sold. That beat an expected decline of up to 5% forecast by analysts, according to a Reuters poll.
Fiat Chrysler Automobiles (FCAU) - Get Report posted a 7% increase in unit sales, helped by steep discounts for an aging minivan model that's about to be replaced by the new Chrysler Pacifica minivan.
General Motors (GM) - Get Report , the U.S. market leader, said sales for the month were flat. Sales to fleets fell 23% while retail sales to individuals rose 9% for the month. GM aims to reduce its proportion of fleet sales, which produce less profit than retail sales, to 20% of the total in the U.S., compared with 22% in 2015.
"Coming off a record year for new car sales, and heading into a winter month punctuated by a powerful weekend blizzard, most analysts expected flat sales last month. Instead, we got the third-best January sales in 40 years, and continued growth in the new car market. Many brands had their best January sales ever, suggesting the new-car party will continue into the new year," said Karl Brauer, an analyst for Kbb.com.
New vehicle transaction prices rose 2.8% year-over-year to an average $34,112, according to Kelley Blue Book. But average transaction prices fell 1.6% from the previous month.
No. 2 Ford Motor (F) - Get Report reported a 3% drop in vehicle sales for the month, including the top-selling F Series pickups, which were off 5%. Ford's Lincoln luxury brand was up 8%. Toyota Motor (TM) - Get Report sales fell 4.7% while Nissan Motor's (NSANY) rose 1.6%, Honda Motor (HMC) - Get Report sales for the month were down 1.7% and Hyundai Motor's (HYMLF) rose 1 %.
Economists are watching for any weakening in auto sales, big-ticket consumer items, which could foreshadow a weak first-quarter gross domestic product number for the period. Conversely, strong auto sales imply a high degree of confidence in continued employment and personal financial stability.
Analysts had been expecting vehicle sales to get hurt in January because of poor weather. Following six straight years of annual sales increases by the industry and record sales in 2015, consumers could be expected to pause in their vehicle replacement. Yet, underlying demand seems strong, analysts said, pointing to a return to dealerships this month.
The recent blizzard "limited car sales from reaching their full potential," said Jessica Caldwell, director of industry analysis at Edmunds.com, told Forbes. "But weather factors aside, this was still a pretty good month for car sales."
Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.