Bank Of America On 2015 Auto Manufacturers: Keep Those Wheels Turning

In a report published Tuesday, analysts at Bank of America took a look at the U.S. auto manufacturers' industry, which saw January U.S. light vehicle sales rise 9.3 percent year-over-year on a selling-day-adjusted basis, above the firm’s mid-month estimate of +8.0 percent “for a seasonally adjusted annualized rate (SAAR) of 16.6mm (BofAMLe 16.4mm, consensus 16.6mm).”

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“It should be noted that the YoY comparison was particularly easy this month, given the extreme winter weather that negatively impacted Jan 2014’s auto sales,” the report explained. Nonetheless, given that the fourth quarter of 2014 witnessed a SAAR pace of 16.7mm, analysts believe January 2015’s rate “is a solid starting point for growth throughout the year.”

As consumer confidence improves and gas prices remain low, the research firm expects “a continuation of the positive mix shift towards toward light trucks, SUVs and CUVs. This mix shift, in turn, has been driving positive industry pricing dynamics, and TrueCar estimates that average transaction prices (ATPs) rose by 3.5 percent (+$1,105/vehicle) to $32,812, while incentives remained moderate, increasing 3.6 percent (+$93/vehicle) YoY.”

Below are some highlights from January:

Ford

Ford Motor Company F saw its January light vehicle sales inch 11.3 percent year-over-year, for a market share of 15.2 percent. The report states:

“While Ford’s market share remains hampered from the substantial production downtime associated with the F-150 changeover, we are encouraged that F-Series sales were up approximately 13 percent YoY in the month. We expect a full ramp-up for the new F-150 by H2:15, which should add meaningfully to sales. While light truck sales were impressive on F-series strength, up 16 percent YoY, all segments were solid, with cars up 13 percent and utilities up 4 percent.”

In general, the analysts expect “some additional near-term share loss, as the F-150 changeover at the Kansas City facility weighs on sales, although this should largely reverse in 2H:15.”

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General Motors

General Motors Company’s GM light vehicle sales also grew, by 13.7 percent, for a market share of 17.7 percent. Trucks and SUVs were the stars, with light truck sales up 31 percent. On the opposite, car sales fell 11 percent.

Regarding brands, GMC was the best performer, with sales up 25 percent, followed by Chevrolet, up 16 percent. However, Cadillac and Buick’s sales fell 1 percent and 9 percent, respectively.

“TrueCar and Kelly Blue Book both estimate that GM experienced healthy YoY improvement in ATPs, due in part to the positive mix shift towards trucks/SUVs, which largely offset higher incentives,” the report explains.

Strength Across The Board

Finally, Fiat Chrysler Automobiles NV FCAU posted another strong month, with sales up 9.3 percent. The report qualifies the growth as “impressive given its +16 percent sales growth in 2014. Most of the Japanese automakers came in better than expected, led by Mitsubishi, which saw unit growth of 28.3 percent YoY […] Subaru sales rose 18.9 percent, Toyota Motor Corp (ADR) TM 11.2 percent, Honda Motor Co Ltd (ADR) HMC 11.0 percent and Nissan Motor Co Ltd (ADR) NSANY 10.6 percent, while Hyundai/Kia fell 1.7 percent YoY. VW/Audi sales were essentially flat at 0.3 percent YoY, but the other luxury brands had positive growth (Porsche +22.3 percent, Daimler +4.8 percent and BMW +2.7 percent).”