New-vehicle sales are expected to fall 4 percent year-over-year to a total of 1.275 million units in February, resulting in an estimated 16.7 million seasonally adjusted annual rate (SAAR), according to Cox Automotive.

"The sales pace slowed in January, and our expectation is that February is going to be even weaker," said Charlie Chesbrough, senior economist for Cox Automotive. "Sales should fall about 4 percent on a year-over-year basis, resulting in the weakest February sales period since 2015.

"February has typically been in the bottom three months of the year for new vehicle sales, as much of the market waits for the spring selling season," Chesbrough added. "The number of selling days in the month is unchanged from last year, so the expected decline is not calendar driven. There is some indication that Winter Olympics can influence weaker performance relative to a "normal" February. The record for February was hit in 2000, when sales reached 1.5 million for the month and an 18.9 million SAAR.  Achieving that level again this year seems highly unlikely."

Cox Automotive analysts are looking at a number of headwinds for the auto industry. Federal Reserve interest rate increases are starting to have an effect on the economy and auto loan rates have risen to levels not seen since 2013. In addition, the recent volatility on Wall Street has likely negatively impacted vehicle buyer's confidence. Maybe most importantly, as a result of aggressive leasing strategies in recent years there are millions of "gently used" off-lease vehicles available providing growing competition for the new-vehicle market.

However, there is still a lot of positive economic news to support a robust vehicle market. Record equity markets, low unemployment and strong consumer confidence are keeping demand for personal transportation high. Recent tax reform will aslo add additional support to the vehicle market in 2018. Cox Automotive expects 2018 sales to fall 400,000 units from 2017 levels and finish near 16.7 million. 

Key Highlights for Estimated February 2018 Sales Forecast

• In February, new light-vehicle sales, including fleet, are expected to reach 1,275,000 units, down 4 percent compared to February 2017 but up nearly 11 percent from last month.

• The SAAR for February 2018 is estimated to be 16.7 million, down from 17.1 million in January 2018 and from 17.3 million in February 2017.

• Fleet sales are generally higher in February and as a result retail sales are expected to account for 81 percent of volume.

Most Automakers Expected to Decline In February Compared to Last Year
Cox Automotive expects most OEMs to report lower year-over-year sales in February. The market generally sees domestic vehicles sell slightly better than foreign makes, as buyers take advantage of model year clearance offers. However, the recently launched Honda Accord and Toyota Camry models may disrupt this trend.  

"Just as we saw last year, not every month is going to be a great month," said Rebecca Lindland, executive analyst from Kelley Blue Book. "We're in a post peak-demand world, so not every manufacturer will see increased sales each month. The brands and models that provide the most emotional and practical solutions for today's shopper— particularly SUVs and crossovers—will be the ones that succeed in this market."

No Change: SUVs and Pickups Continue to Take Share from Car Segment
Car sales are expected to continue their decline as consumers' preference for SUVs and crossovers grows. Some decline in pickup sales is expected due to buyers waiting for the new GM and RAM models to arrive.

"February was truck month, as every month in 2018 might well be as a batch of new trucks go on sale," said Michelle Krebs, executive analyst at Autotrader. "February truck incentives were plentiful—Ram is cleaning out its current 1500 as it gets ready to launch its new one. General Motors launches its new Chevrolet Silverado and GMC Sierra later this year, so it is discounting the current versions."

There were 24 selling days in February 2018, the same number as in February 2017. All percentages are based on raw volume, not daily selling rate.