By Gary S. Vasilash

J.D. Power and GlobalData project that February sales will come in a smidge—1.4%–more than they were in February 2023, or 1,214,600 vehicles

Taking out non-retail transactions, the number is 981,300, which is the important number because that reflects individual consumers.

So using that as the basis of comparison, there is an increase of 3.8% compared to the same month last year.

One of the reasons for the rise this year is something that happens once every four years: an additional day of sales, February 29.

According to Thomas King, president of the data and analytics division at J.D. Power, the increase in sales is facilitated by:

• Higher inventory levels (when there are cars on the lot, then there is less pressure to have to select whatever is available from a paltry number)
• Higher manufacturer incentives (turns out that there is a need to provide a boost to get the sheet metal moving)
• Lower dealer profit margins (seems that the profits that were rolling in when choice was minimal so prices were maximal are now trending back to normal—but it is worth noting that about 17% of vehicles are still selling above MSRP, although last year it was nearly 32%)

What this means is that people are getting bullishly back in the market.

King:

“Transaction prices in February are trending towards $44,045, down $1,919 or 4.2%—from February 2023. However, despite the significant decline in average transaction prices, higher sales volumes mean consumers are on track to spend nearly $40.8 billion on new vehicles this month—the highest on record for the month of February, and 4.1% higher than February 2023.”

Could be a case of the proverbial “making it up on volume.”

Nowadays, it is impossible not to look at how things are going in terms of EV sales.

Elizabeth Krear, vice president, electric vehicle practice at J.D. Power, said, “In 2023, EV sales and leases accounted for a larger percentage of retail auto industry growth than gas-powered vehicles.”

Presumably that has something to do with the fact that there is a stable number of gas-powered vehicles so the growth would not be as big as that of EVs, which start from a comparatively smaller number.”

She acknowledged what is now frequently heard: EV sales are slowing.

Putting some numbers to it:

“In January, battery electric vehicle sales fell 1.6 percentage points from 9.2% in December 2023. Further, upper-funnel EV shopper interest declined for a fourth consecutive month. New-vehicle shoppers who are ‘very likely’ to consider purchasing an EV for their next vehicle dropped to 25.6%, a full percentage point lower than in December.”

Krear said that a big blockage for EV buyers: charging access.

While she noted that the opening of the Tesla Supercharger network will go a long way toward addressing that issue, she added, “But this alone is not enough to move the needle. Improvement is needed in terms of the availability of affordable EVs for mainstream customers.”

Yes, it all comes down to an affordable MSRP.