This week’s auto sales numbers show that Ford (F:NYSE) has claimed the top spot in the United States. What does this say about the auto industry, and its overall performance so far this year?

The auto industry’s monthly sales report has always been watched by economists and Wall Street investors alike. Wall Street economists have always placed emphasis on the monthly vehicle sales report because it offers a rather reliable gauge as to the health of the U.S. consumer.

But this month, the industry has been fraught with obstacles – the 8.5 million-car Toyota recall, and the massive winter weather storms that paralyzed the East Coast may have cost the industry millions.

“While February sales have improved from a year ago, the pace of the recovery has hit a speed bump,” said Jeff Schuster, forecasting chief at J.D. Power & Associates in Troy, Michigan, to BusinessWeek magazine. “Because of the Toyota recall, buyers are sitting on the sidelines. The severe storms in February also had some impact.”

Continued uncertainty surrounding the labor picture in the country caused many analysts to lower their expectations for February’s auto sales report.

Some on Wall Street were expecting the month-over-month number to be flat, or even lower, than January’s auto sales figures. However, everyone was in agreement that the year-over-year figure would be higher than when the auto industry was only selling 9.2 million units annualized.

The February 2009 pace was the lowest since 1981.

Before the figures for February’s auto sales were released, analysts were speculating about individual companies. Would spurned Toyota lovers buy cars from competing companies?

Auto Rivals

Toyota has the biggest issues. Sales of many lines were completely frozen for weeks amid a recall of over 8 million vehicles. (Honda recalled under 500,000 for an airbag default.) Toyota was expected to see sales drop 10% compared with last February.

Many were speculating that Toyota’s well-documented woes would hurt other Japanese brands as well. “Toyota is the flagship for products from Japan,” Schuster told CNNMoney. “It’s hard to document how much it could hurt the other Japanese [auto] brands, but clearly it has the potential to ripple through.”

That may be good news for the American auto industry, with General Motors (GM) and especially Ford expected to gain market share. The chink in Japan’s armor couldn’t come at a better time for American automakers. Not only does the industry need as much help as it can get, but it comes at a time when American quality has caught up to foreign imports.

In 2000, Ford and Chevrolet owners reported 29-42% more problems with their cars than Toyota and Honda. In 2009, that gap had closed to 1-4%.

David Cole, chairman of the Center for Automotive Research, believes the recalls have changed the face of the auto industry. “The perception-reality gap is now gone. When you lose that aura, the whole deck gets reshuffled.” Toyota may see its lowest market share in five years. Ford could even pass Toyota, becoming the second-largest seller in America, at least temporarily.

Outside of Toyota and Chrysler, all other major brands are expected to see an increase in year-over-year auto sales.

Before the report was released, estimates from Edmunds.com showed year-over-year auto sales should increase 35.3% for Ford, 16.2% for GM, 38.1% for Nissan, 24.7% for Hyundai and 24.1% for Honda. Sales for Chrysler are expected to decline 20.2% and 10.1% for Toyota.

Ford Rising

Here are the actual figures…

Ford sold 142,285 vehicles. That’s a 43% jump in sales, and the climb was mostly attributed to a rebound in truck sales.

MarketWatch reported, “Ford car sales surged 54% while truck sales rose 36% from a year earlier, helping the company, which continues to thrive in the wake of competitor bankruptcies and mounting quality woes, reach a total U.S. market share of perhaps 17%.”

General Motors sold 141,951 vehicles. Deliveries climbed 12%, reported Bloomberg, but that’s less than the 20% some analysts were predicting.

General Motors’s sales were also less than those of rival Ford. For the first time since 1998, Ford has sold more autos than General Motors.

When brands like Saab, Saturn and Pontiac are excluded – the nameplates that General Motors will be getting rid of – sales climbed 32%, which is a good sign for General Motors.

The Rest of the Rest

So how did the rest of the industry perform?

Chrysler – predicted by industry analysts to see a fall – actually increased auto sales by a modest amount.

Only Toyota – reeling from massive vehicle recalls and auto sales freezes – saw their numbers decrease. And even that fall was less than expected: only 8.7%, instead of the consensus 12% analysts saw going in.

Mercedes-Benz USA said Tuesday that its February auto sales rose 8%. The company reported total auto sales rose to 15,385 vehicles, from 14,199 last year. And, so far for 2010, Mercedes has sold 30,543 cars from 24,632, a rise of 24%.

Overall, it was a relatively good reading for the auto industry. Sales of autos across the board were up compared with a year ago… despite multiple East Coast snowstorms that General Motors estimates knocked sales back 5%.

The annualized selling rate rose to 10.28 million units from 9.17 million a year ago, a 12% increase. The February figure was down from January, which reported 10.78 million units. Moving forward, analysts expect the March auto sales figures to be even better as the spring selling season begins.

Progress, Progress, Progress

Even though this across-the-board increase of 12% year over year comes after one of the worst sales years on record, analysts are seeing signs of hope.

These were generally positive numbers – much better than anything in housing, for instance – and they fit the profile of a slowly recovering industry well.

In the long term, though, the large automakers seem to be facing a nice recovery that will lift all boats. It won’t be a straight line up, but thus far, the dips down have been mild. This February’s numbers are a perfect example. Slightly worse than January’s, but still good enough to be seen as positive news.

Also good news was GM’s record sales posted in India.

According to The Financial Express, a division of India Express Ltd., General Motors sold 11,111 vehicles last month, “the highest monthly sales since its inception in the country.” But more interestingly, this figure is more than double that of January’s auto sales.

In January, General Motors sold 4,921 vehicles in India.

That’s a nice boost, and the first time the company has crossed the 10,000 mark since it started selling vehicles in India in 1996.

The data shows that buyers favored small cars… Sales for General Motors’s Beat and Spark were considered robust.

As a result, the company is adding shifts at two of its plants in order to meet demand.

Another sign of progress comes from those Mercedes-Benz numbers…

The German auto giant said its GL-Class was the company’s top performer, by posting a 45.5% increase, selling 1,368 units versus 940 last year. The starting list price for a Mercedes GL-Class is $60,000, so consumers seemed willing – and able – to acquire the high-valued item.

The uptick in sales of Mercedes-Benz vehicles wasn’t exclusive to the United States, either. Mercedes-Benz Canada reported a record-breaking auto sales total of 2,011 sold in February. The company posted an increase of 28.9% from February of last year, which was the best February ever for the Mercedes-Benz Canada group. Year-to-date, the company has seen its auto sales increase 31%.

It seems that the running theme for most industries is an increase in sales outside of the U.S. market… But February’s overall figure show that the rebound is occurring in the States too, and that bodes well for the industry as a whole.

Don't forget to follow us on Facebook and Twitter for the latest in financial market news, company updates and exclusive special promotions.

P.S. Here's a retirement secret the government doesn't want you to know about... so much that they actually forbid companies from advertising these turbo-charged, broker-free “retirement plans” to the general public. But now you can find out how the “best-kept secret” could hand you as much as $500,000 in retirement savings starting with as little as $60 per month. Why are so many people on Wall Street determined to keep this quiet? Find out in this report containing your three BEST retirement investment plans.

Other Articles Related To The Auto Industry:

Comments (3)