By Demian Russian
With Sirius XM Radio’s (NASDAQ:SIRI) business tied so closely to the OEM channel, the year is beginning to shape up nicely for the Satellite Radio service provider with February auto sales coming in stronger than expected. According to Edmunds.com, total vehicle sales for the month came in close to 994,000. This translates to a SAAR (Seasonally Adjusted Annualized Rate) of 13.3 million.
January and February are traditionally the weakest selling months of the year, but February’s SAAR showed sales strength not seen since August 2009, during the time of the “Cash for Clunkers” government stimulus program. With the first two months of the year historically being weak, the sales strength seen in January and then continuing stronger in February bodes well for the auto industry going into March, when spring sales typically begin to ramp. “This was a good month moving into March,” said Jessica Caldwell, the Director of Pricing and Industry Analysis at Edmunds.
The strength in February was seen across the board, with all of the Big 6 automakers producing double digit gains year-over-year. General Motors (NYSE:GM) led the pack reporting a 46% increase, followed by Toyota (NYSE:TM) with 43%, Nissan (NSNAY) with 32%, Honda (NYSE:HMC) with 22%, Chrysler with 13%, and Ford (NYSE:F) with 10%.
Hyundai posted record sales for the month, up 17% month-over-month and 28% year-over-year. Hyundai sales were driven by retail sales through dealerships, which rose 46% year-over-year. The Sonata saw a 103% retail increase, followed by the new Elantra with a 74% increase. As sales shifted towards retail, fleet sales saw a 22% decline. “Consumer activity was high, credit was readily available and the overall impact on the Hyundai business was really encouraging,” said Dave Zuchowski, Hyundai Motor America’s executive vice president of national sales.
Kia also reported its best February sales ever, up 36.4% year-over-year and 18.1% month-over-month. February was the sixth month in a row of record breaking sales for the Korean automaker. “With back-to-back monthly sales records in 2011 we are well ahead of last year’s record first quarter sales pace,” said Byung Mo Ahn, CEO of KMA and Kia Motors Manufacturing Georgia.
Sirius XM has a 100% penetration rate in new vehicles manufactured by both Hyundai and Kia. Read More
With Sirius XM Radio (NASDAQ:SIRI) needing to bring in 442,000 new subscribers during the fourth quarter to meet its full-year subscriber guidance of 1.6 million net additions and the company deriving the large majority of its new subscribers additions from OEM Satellite Radio activations, investors are closely watching the auto sales channel for signs off strength heading into the close of year.
