Winter Stalls Car Sales

By Thursday Review staff | Published, Monday, February 3, 2014 |

If the multiple extreme weather storms, now each known as Polar Vortex Parts 1 through 3, brought cars and trucks to a standstill across much of the middle and Deep South, so it was for auto dealers nationally in almost every state.

One of the more striking (but perhaps predictable) outcomes of so much extreme cold was to spawn the slowest thirty day period for new and used car sales since the start of the Great Recession in 2008. The brute cold kept buyers off of car lots, and drove sales down for several automakers, including General Motors, Ford, Toyota and Volkswagen, all of whom had previously forecast improved sales for the same 30 day period, generally a slow month for auto sales but expected to perform slightly better thanks to some improvements in the overall economy.

Of the U.S. automakers, General Motors felt the biggest impact with a 12 percent decrease as compared to January 2013. But Volkswagen took the hardest hit with a 19 percent decline in sales.

But a few automakers actually reported an increase in cars sales, including Chrysler, which managed to gain about 8% over last year. The biggest winners were Subaru and Nissan, each of whom saw a jump in sales of newly repackaged and redesigned small, more fuel-efficient SUVs.

The automakers and many car dealerships generally felt the weather was the decisive factor in the downturn, citing multiple days of subfreezing temperatures across two thirds of the country, and subzero temperatures across a wide swath of the north and Midwest. Car shoppers did not want to contend with the icy conditions, and the cold and snow would have dissuaded consumers from considering comparing trucks and cars on open lots.

The extreme cold also hindered or halted some distribution and delivery to many parts of the country as roads and bridges were closed, rail traffic slowed, and even secondary roads became impassable to auto delivery trucks.

The good news is that automakers and their marketers see a good February and a better March as many of the same consumers reluctant to venture out to kick the tires of new cars—in the snow and ice and chill—will have a warmer-than-average month in which to window shop, and, hopefully make a purchase.


Related Thursday Review articles:

Polar Vortex Economy: Losers, Winners; Thursday Review; Sunday, February 2, 2014.

An Inconvenient Chill, Again; R. Alan Clanton; Thursday Review; January 4, 2014.