DETROIT—U.S. light-vehicle sales rose 1.2 percent in January with higher incentives and light-truck demand luring consumers even as severe cold temperatures across large swaths of the country put a chill in some showroom traffic.
The seasonally adjusted annual sales rate for January came in at 17.18 million, on par with December's blistering 17.86 million rate.
Higher fleet shipments, notably at GM, Toyota and Nissan, also helped the industry record its fourth-best January—about 1.16 million car and light truck deliveries. The month is historically the weakest period of the year for volume.
"We're encouraged by the strength of the market," said Jack Hollis, general manager of the Toyota Division.
Toyota Motor Corp. posted its biggest U.S. sales gain in nearly four years while Fiat Chrysler recorded another double-digit decline as auto makers marked January with contrasting fortunes.
Toyota's 17 percent advance reflected its biggest monthly jump since May of 2014. General Motors, with a boost from fleet sales, chalked up its fourth-straight monthly gain while Nissan Motor volume climbed 10 percent.
Ford Motor Co. ended a four-month winning streak with a 6.3 percent decline. FCA U.S. extended its losing skid to 17 months while continuing to slash fleet deliveries.
Breakdown by company
GM notched a 1.3 percent advance last month. Volume rose 5 percent at Chevrolet thanks to truck and crossover demand. Buick was up 4 percent, while GMC dropped 11 percent and Cadillac fell 3.9 percent.
GM retail deliveries dipped 2 percent and fleet sales rose 16 percent. Combined commercial and government deliveries jumped 44 percent, daily rental volume was off 7 percent.
U.S. sales of the Chevrolet Equinox, Traverse, Trax and Bolt EV each set January records. Demand for the Colorado pickup spiked 25 percent and Silverado volume jumped 15 percent.
Ford Motor's 6.3 percent decline stemmed from a 23 percent decline in car volume and a 12 percent drop in fleet shipments.
Deliveries were down 5.2 percent at the Ford division and 27 percent at Lincoln. In addition to the decline in fleet volume, Ford said retail sales dropped 4.3 percent last month.
At Honda Motor Co., volume slipped 1.7 percent last month on lower Honda CR-V and Accord demand. Deliveries fell 1.6 percent at the Honda brand and 3.2 percent at Acura.
Nissan Motor Co. said its sales rose 10 percent, with volume up 12 percent to a January record of 112,903 at the Nissan brand but down 8 percent at Infiniti. Combined sales of Nissan brand crossovers, trucks and SUVs set a January record, up 18 percent, the company said.
FCA U.S.' sales fell 13 percent. Retail volume rose 2 percent to 111,577 but fleet shipments were off 50 percent. Demand rose 2.2 percent at Jeep and fell 16 percent or more at the Ram, Chrysler, Dodge and Fiat brands.
Sales edged up at Kia and rose 1.1 percent at Subaru, 15 percent at Mazda, 5.2 percent at the Volkswagen brand and 31 percent at Mitsubishi last month. Volume at the Hyundai brand dropped 11 percent.
Among other luxury brands, January deliveries increased 61 percent at Volvo, 4.7 percent at Porsche, 5 percent at BMW and Land Rover, and 9.9 percent at Audi, but dropped 11 percent at Jaguar and Genesis.
Trucks, crossovers and SUVs
Sales last month continued to be driven by healthy light-truck demand, notably crossovers, while car and fleet volumes remained weak. Overall, light truck demand surged 8.1 percent while car volume skidded 11 percent in January.
Low interest rates and gasoline prices, steady job gains and lofty U.S. equity markets also are supporting industry sales, auto makers and analysts say.
The U.S. new-vehicle market, after seven straight annual gains capped by a record 2016, dropped 1.8 percent to about 17.3 million last year.
While tax reform is expected to provide a lift to U.S. sales, analysts say rising interest rates will counter any gains in 2018. The Federal Reserve declined to raise interest rate this week but signaled it is prepared to do so next in March.
Overall, U.S. sales are forecast to drop below 17 million in 2018 for the first time in three years, with most 2018 estimates from analysts ranging from 16.7 million to 16.9 million.
AutoNation Inc., the nation's biggest dealership group, on Thursday projected new light-vehicle deliveries will total 16.8 million this year.
"The marginal expected year-over-year contraction will be caused by the reduced availability of auto credit, falling used-car prices, rising interest rates, and less favorable lease options for consumers," S&P said in a report this month.
"There's a lot of good economic news to support an optimistic view of automotive sales this year," said Charlie Chesbrough, senior economist for Cox Automotive. "Record equity markets, low unemployment, strong consumer confidence—a recipe for robust vehicle demand. And the recent passage of tax reform will only add additional support."
But Chesbrough says the industry also faces several headwinds in early 2018, notably reduced incentives "from recent levels as year-end clearance sales end." Off-lease vehicles at dealerships after the fall's pull-ahead programs will also capture some new-vehicle buyers, he says.
Some analysts believe large pickups could be a beneficiary of recent U.S. tax reform. The legislation allows businesses filing as pass-through entities—including sole proprietorships and partnerships—to deduct up to 20 percent of qualified business income. "With construction and related small businesses active in the pickup market, the net result should improve the after-tax earnings of some small business owners—which could boost pickup sales for their small fleets," Barclays analyst Brian Johnson said in a note to investors this week. "In addition, under the new tax act commercial fleets can likely enjoy faster depreciation schedules, further supporting pickup sales."
"Optimism for a solid 2018 seems to be growing," said Jeff Schuster, head of forecasting at LMC Automotive. "Most variables are aligned favorably, with the majority of that positive weight being carried by an expected boost in the economy. The tax cut is expected to help drive the economy toward the 3 percent growth level, which we haven't seen since 2005."