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Winter weather chills auto, retail sales


Auto dealers and other retailers are welcoming forecasts for warmer temperatures this week as harsh winter conditions in January hurt sales, including the first drop in automobile volume sold since September.

The continuous snowfall and low temperatures are estimated to cost the U.S. economy $20 million to $40 billion, according to University of Maryland economist Peter Morici.

National automobile sales dropped 3 percent, but area auto dealers expect to see an increase starting later this week, when temperatures are forecast to reach the 50s.

U.S. automakers sold just over 1 million vehicles in January, about 32,000 fewer than the same month last year, according to industry research firm Wards Automotive. Chrysler reported strong January sales, up nearly 8 percent from the same month last year. However, General Motors, Toyota and Ford — the top-selling companies in the U.S. — all reported sales declines, largely because of the weather.

“January is not a robust month for car sales to begin with, but we were down a little bit more than we had anticipated in January, and I think in large part it was due to weather,” said Tim Doran, president of the Ohio Automobile Dealers Association.

February tends to be a better month for auto dealers, depending on the weather, “with it gradually ramping up into March and April as very strong,” Doran said.

The average age of all cars and light trucks on the road is now a record high of 11.4 years, according to automotive data firm R.L. Polk. The nation’s aging light vehicle fleet is creating pent-up demand that is expected to spur U.S. new-vehicle sales higher, analysts said.

Huntington Bank’s second annual Midwest Economic Index, released last week, found that 22 percent of consumers in Ohio, Michigan, West Virginia, Indiana and Western Pennsylvania are considering buying or leasing a vehicle in 2014. That represents a 1 percent increase over last year as analysts forecast one of the best years in auto sales since before the recession, officials said.

“We’re projecting an increase in auto sales in 2014 as consumers’ needs align with a buyer’s market,” said Rich Porrello, director of Huntington’s Auto Finance division, in a statement.

Auto sales fuel the employment of thousands of Ohioans. Extensive Honda operations in west-central Ohio and a DMAX truck-engine plant in Moraine are among multiple employers in the region that are tied to the industry. And sales taxes generated by auto sales also are pivotal for state and county governments in Ohio and elsewhere.

The National Automobile Dealers Association predicts 16.4 million new cars and light trucks will be purchased or leased in the U.S. this year, a 5.8 percent increase from 2013.

The President’s Day holiday on Monday resulted in several early morning car sales at Key Chrysler Jeep Dodge Ram in Xenia, which was a good indicator of “pent-up demand,” said owner Terry Tobey.

“We are anticipating a very, very big end of the month,” he said. “The incentives are spectacular, we’ve got the (Dayton) Auto Show going on, so we think that will generate some business.”

This year’s Dayton Auto Show is Thursday through Sunday at the Dayton Convention Center.

Tobey said his Chrysler sales for January ran contrary to national trends, with four or five fewer vehicles sold compared to last year. “You have to attribute that to the weather, too, because it was just tough,” he said.

In addition to keeping car shoppers at home, the frequent bouts of winter weather have made it a challenge for dealers to move snow off their lots and keep vehicles clean, Tobey said.

Restaurants both locally and nationally also have been hit hard. A snowstorm and sub-zero temperatures during the first week of the Miami Valley Restaurant Association’s Restaurant Week promotion prompted more than half of the participating restaurants to extend the special menus and discounts to a second week, which then brought a second snowstorm.

The national Restaurant Industry Snapshot for January, released last week by Black Box Intelligence market-research firm, showed that same-store sales fell 0.9 percent in January, the second consecutive month that same-store sales declined.

Overall January retail sales, excluding automobiles, gasoline stations and restaurants, were flat compared to December, according to the National Retail Federation.

U.S. Census Bureau data released last week that includes the automobile, gas stations and restaurant categories showed retail sales decreased 0.4 percent from December.

“Extreme temperatures and severe ice and snow are making it increasingly difficult to assess if the retail sales slowdown is temporary or a telling sign of a longer lasting weakness in the consumer-fueled economy,” said Jack Kleinhenz, the retail federation’s chief economist, in a statement.

Earlier this month, the National Retail Federation released its annual economic forecast projecting a 4.1 percent increase in retail sales in 2014.

The Associated Press contributed to this story.



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