What blizzard? Why Fiat Chrysler sales surged in January

Fiat Chrysler sales in January were boosted by some unlikely vehicles — including an 83 percent increase for the heavily discounted Dodge Caravan minivan.

(Tanya Moutzalias/MLive Detroit via AP, Pool)
President Barack Obama, 2nd left, takes a look at the new 2017 Chrysler Pacifica alongside Mitch Clauw, from left, Fiat Chrysler's vice president of vehicle of engineering, Paul Sabatini, chairman of the North American International Auto Show (NAIAS) and Dennis Williams, president of the UAW, while touring the NAIAS at Cobo Center in Detroit on Jan. 20, 2016.

Fiat Chrysler's January U.S. sales rose a healthy 7 percent, a sign that the auto industry shoveled past a snowstorm that buried East Coast population centers late in the month.

The Italian-American automaker said Tuesday that it sold just over 155,000 cars and trucks last month compared with 145,000 a year ago.

But Fiat Chrysler wasn't led by its usual big sellers. The Jeep Cherokee and Grand Cherokee and the Ram Pickup all posted modest increases. Instead, the sales were boosted by some unlikely vehicles — including an 83 percent increase for the heavily discounted Dodge Caravan minivan. FCA also reported a 70 percent rise in Dodge Durango SUV sales, and a 39 percent increase for the Chrysler Town & Country minivan.

Analysts are predicting a sales drop from a year ago due to the snowstorm after all automakers finish reporting numbers on Tuesday. Big East Coast metro areas such as New York and Washington, D.C., were buried under more than 2 feet of snow the weekend of Jan. 22.

J.D. Power and Associates forecast a 4.5 percent sales drop from a year ago at just under 1.1 million cars and trucks, while the TrueCar.com auto pricing site expected sales to fall 0.3 percent to 1.15 million.

"The snowstorm on the East Coast disrupted an estimated 15,000 sales," John Humphrey, J.D. Power's senior vice president of automotive, said in a statement. But Humphrey said those sales were merely postponed, not lost. He expected some catch-up last weekend and into February.

Last month also had two fewer selling days than a year ago when January sales hit their highest point in nine years.

TrueCar predicted small sales increases for General Motors, Volkswagen and Nissan, and a small decline for Ford. Honda and Toyota were expected to see sales fall by 5 percent or more. Honda and Toyota rely more heavily on fuel-efficient car sales than trucks and SUVs as cheaper gas helps push buyers toward larger vehicles.

The LMC Automotive consulting firm is sticking with its prediction of a record sales year at 17.8 million sales, although the growth rate will be far slower than past years and could touch off more intense competition for buyers.

As the Associated Press reported earlier, in 2015 Americans bought more new cars than ever before.

US auto sales hit a record high of 17.47 million in 2015, topping the old record of 17.35 million set in 2000. Analysts expect sales could go even higher this year as unemployment continues to decline and more young buyers enter the market.

Low gas prices and historically low interest rates left more money in buyers' pockets. Nationwide, gas prices ended the year at an average of $2 per gallon, according to AAA. And while the Federal Reserve raised a key interest rate in December, it remains near zero. By comparison, that rate was 6.2 percent in 2000.

Oliver Strauss, the chief economist at car buying site TrueCar.com, says the interest rate would have to reach 3 percent before it would cause car sales to stagnate.

Employment numbers also improved last year, so more buyers — particularly the huge generation of under-34 millennials — found they could finally afford a new car. People who held off purchases during the recession were also lured back into the market by enticing new vehicles like the Jeep Cherokee and the revamped Ford F-150 pickup. Ford sold 780,354 F-Series trucks last year — more than one every minute — making it the nation's top-selling vehicle.

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