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Auto sales should be up this month, analysts say
Credit goes to heavy advertising, new models, Asian automakers' strength
Dee-Ann Durbin / AP Auto Writer

DETROIT -- Despite a major blizzard, February auto sales should be up over last year thanks to heavy advertising, a blitz of new products and the continued strength of Asian automakers, industry analysts said Friday.

Several Wall Street analysts predicted U.S. sales will be up between 1 and 3 percent over last February when automakers report sales Wednesday.

General Motors Corp. could be among the biggest beneficiaries after piquing customers' interest with advertising during the Super Bowl and the Olympics, Goldman Sachs auto analyst Robert Barry said in a note to investors. GM is seeing healthy sales of its new cars, including the Buick Lucerne and Chevrolet HHR, Barry said.

Tim Ryan, a manager at Don Brown Chevrolet in St. Louis, said he is selling the HHR retro crossover as fast as he can get it onto his lot.

"That is a red-hot vehicle for everyone right now," Ryan said. Ryan said the HHR's competitive pricing -- it starts below $16,000 -- is one reason it's selling so well. GM lowered prices on most of its vehicles in January, another move that's fueling customer interest, analysts said.

GM's new lineup of sport utility vehicles -- including the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade -- also hit the market in February, which should give the automaker at least a short-term boost in sales, Merrill Lynch analyst John Murphy said in a research note.

"We believe that (GM's) new SUVs will be the litmus test showing whether or not consumer tastes have shifted away from large trucks," Murphy said. "Sales of the refreshed Ford Explorer did not do well last fall, but its launch unfortunately coincided with two hurricanes and record gas prices."

Most analysts predict Toyota and Honda will again see their sales increase by double-digit percentages. Honda, in particular, could see sales of its redesigned Civic up by 50 percent or more, and its Ridgeline pickup also is a strong seller, Murphy said.

Ford Motor Co. and DaimlerChrysler AG's Chrysler Group are likely to see lower sales in February despite signs they have spent more on incentives, Burnham Securities analyst David Healy said. Chrysler introduced zero-percent financing on trucks and SUVs, while Ford is offering cash back and special financing deals.

Ford and Chrysler's cars are selling well, but they can't make up for the losses they're experiencing on the truck and SUV side. Edmunds.com, a vehicle research site, said it expects Ford sales to fall 8 percent in February, while Chrysler's could be down 6 percent.

U.S. automakers surprised analysts in January by boosting their results with an influx of sales to government and corporate fleets. Fleet sales accounted for nearly 40 percent of sales at GM and Ford in January and an estimated 30 percent at Chrysler, Healy said.

Automakers generally try to limit fleet sales, which are less lucrative and can hurt a vehicle's resale value by flooding the market. But analysts said it's difficult to predict whether fleet sales could be a major factor again in February.

"Following the boom in January we don't expect another upside surprise from fleet in February," Murphy said. "However, it is largely up to a company's discretion when to push the fleet channel, so it retail is particularly weak for the Bug Three, another push is possible."

GM shares were down 60 cents to close at $19.99 on the New York Stock Exchange. Ford share were down 7 cents to $8.10, while DaimlerChrysler shares were up 9 cents to close at $55.86.