Washington — Standard & Poor’s said Thursday that auto sales in 2015 are likely to rise less than previously expected after a disappointing February.
Last month, auto sales rose 5 percent over February 2014 for a seasonally adjusted annual rate of 16.2 million units. “Harsh winter conditions in many states hurt last month’s sales pace, slowing down consumer traffic in dealerships. And this is compared with a weak February in 2014,” said S&P credit analyst Nishit Madlani.
Sales momentum should slow somewhat in 2015, and the company now expects sales growth of about 2.5 percent for the remainder for 2015 — slightly below the overall growth in the U.S. economy — followed by a roughly flat performance in 2016. “That is still healthy by any historical standard, but, when interest rates ultimately rise, automakers will have to keep production in check and avoid relying on incentives to artificially support demand, which could erode their profitability,” the company said.
Some automakers said last month they thought 2015 could be better than prior expectations.
Low interest rates and long-term repayments and low-cost leases are helping auto sales continue to rise for the seventh straight year — the longest continuous improvement in auto sales in a half-century. But sales — after rising 16.5 million in 2014, up 6 percent, for the best year since 2006. Sales are expected to rise this year more modestly.