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Cold Weather Impacts January Auto Sales Across The Country

Feb 21, 2014

The bitter cold and numerous snow and ice storms that have hit a vast part of the country during the first six weeks of 2014 have negatively impacted vehicle sales. Nationally, January vehicle sales were approximately one million, a 25% drop from December 2013 and a 3.1% drop from January 2013, primarily because many customers stayed home during the long stretch of winter weather. Many dealerships have a higher inventory of vehicles than normal at the same time that manufacturers are getting ready to ramp up production. It remains to be seen whether incentives are increased to move vehicles off dealer lots, or production is curtailed in order to allow dealers a bit more time to thin their inventory without resorting to artificially inflated discounts.Manufacturers aren’t as concerned, as inventory is typically a bit higher during the winter months and, ultimately, returns to more optimal levels once the weather warms and buyers return to dealer lots in greater numbers.Weather may continue to play a major role in sales until mid-March and the longer the winter weather negatively impacts sales, the more automakers will feel pressure to reduce production or cut prices.