In discussing how car dealers are faring in each of its 12 districts, the Federal Reserve painted a picture of an auto market that appears, for the most part, to be relatively healthy.

In the Fed’s latest Beige Book report, gains were noted on both the retail and manufacturing sides of the car business. Dealers in most districts appear to be in pretty good shape.

“New-vehicle sales were reported as strong or strengthening across much of the United States,” the Fed emphasized in the report, later adding: “Automobile sales were reported as stronger or strengthening during late February and early March in most Districts.”

The Fed then offered a district-by-district breakdown, starting with Boston.

Boston
While the Fed did not report any automotive- or dealer-specific findings from the First District, it did take a look at the region’s retail market, in general.

The report noted that retail contacts “express concern about what rising energy costs may do to consumers’ willingness to spend,” also noting that the majority of retail contacts “characterize year-to-date 2012 performance as strong, attributing this strength to mild winter weather and improving consumer sentiment.”

New York
Next up was the Second District. In the upstate New York part of this area, sales climbed 4 to 7 percent year-over-year in February then continued to hold strong during the opening weeks of March.

“Inventory stock-outs are no longer a factor holding down sales. Business generally remains brisk at dealer service departments, although dealers in the Buffalo area report that unseasonably mild weather has reduced demand for winter-oriented service,” the Fed shared. “Wholesale and retail credit conditions remain favorable.”

Philadelphia
Over in the Third District, things got off to a quick start in February, but slowed down in March.

“Auto sales were robust in February for dealers in New Jersey and Pennsylvania. For the first two months of the year, year-over-year sales growth in New Jersey was reported to be higher than national growth despite a soft January report,” officials noted. “Pennsylvania contacts indicated that March sales were strong but not as robust as in February.”

Looking forward, dealers are expecting the robust market to continue. That said, since the first quarter was so strong, it might “somewhat dampen” spring sales.

Additionally, the Fed shared an interesting tidbit about vehicle pricing in the region during the reporting period.

"Some deals and promotions are beginning to sap strong auto dealer pricing power," officials stated. "This was anticipated as Japanese automakers resumed normal production levels."

Cleveland
For the Cleveland region, dealers described used sales as “fairly strong.” They also said the same for February’s new-vehicle sales, as the market was lifted by unseasonably warm weather.

“We heard one report of a shale gas producer purchasing 75 vehicles from a dealer. On a year-over-year basis, sales were mainly higher,” the Fed stated. “However, some dealers reported seeing a lull in activity, which they attributed to a significant pick up in vehicle leasing at the beginning of 2011.”

Inventory-wise, domestic brands are seeing low supply but imports are “rebuilding stocks rapidly” to recoup market share.

Looking forward, it wasn’t exactly clear how the year will play out in terms of sales. The Fed said half of the contacts there are looking for a repeat of 2011’s sales spike. However, some contacts believe that kind of growth can’t be maintained.

Sharing some insight on auto manufacturing, the Fed noted: “District auto production showed a modest rise during February on a month-over-month basis, while increasing substantially from prior-year levels. Increases were attributed, in part, to the abatement of supply chain issues.”

As for the finance side, the Fed spotted competitive interest rates in the region, but stressed that credit-challenged customers are facing hurdles when it comes to securing loans.

Richmond
Down in the Fifth District, the Fed noticed strength in the auto market.

“Sales of both domestic and foreign cars remained strong, as consumers replaced aging vehicles and looked for better fuel-efficiency,” it shared.

Within its manufacturing analysis, the Fed emphasized the role that cars played in port activity.

"Port activity in the District continued to strengthen since the end of last year, with exports slightly outperforming imports," the report stated. "Several port authorities reported that roll-on, roll-off stock was up. Indeed, several officials noted that autos and automotive parts were key products boosting both imports and exports."

Looking at financing, the Fed gave one example of some positive news for the car business.

"A lending officer in Richmond reported further strength in consumer borrowing, especially to meet home improvement and auto financing needs," it shared.

Atlanta

Further South, the Fed revealed more good news for the car business. It stressed that “auto sales remained strong” in the Sixth District and also shared some positive news on the manufacturing front.

“Several large auto manufacturers announced plans to hire more workers to meet increased demand for their products,” officials emphasized.

Chicago
The Seventh District also showed an increase in auto sales. Helping this gain was the fact that below-prime customers had greater access to credit, the Fed explained.

Overall, households in general were finding it easier for secure credit, especially auto loans and credit cards.

On the inventory front, dealers are still having challenges maintaining enough supply of some popular models, given the supply-chain constraints.

For the district’s manufacturing arena, the Fed found that the car industry remained “a source of strength.”

“Automakers expected sales to continue to increase over the year, but voiced concern that it would be challenging for production to rise much further above what is already planned given the capacity constraints faced by their suppliers,” officials pointed out.

“Confirming this production limit, several auto suppliers reported that they have already been asked by their customers to increase capacity,” they added.

St. Louis
Moving over to the Eighth District, the Fed stressed that dealers in the St. Louis region “have reported strong demand in the luxury automobile market while truck sales have been down.”

Minneapolis
Overall, the Fed discovered that there was modest growth in consumer spending in the Ninth District. As for the car market, it gave this example.

“A Minnesota auto dealer reported that mild weather depressed service and vehicle sales during January and February, but auto sales bounced back in March,” the Fed stated. “In addition, higher gasoline prices don’t seem to be influencing buying decisions away from SUVs and light trucks.”

Kansas City
The 10th District’s auto market experienced a bounce-back in sales. As to what led the increase, dealers pointed to store traffic gains and pent-up demand.
With gas prices high, the Fed found that fuel-friendly sales are robust while there was a slowdown in large SUV and truck sales.

“Expectations for future auto sales remained positive and inventories continued to increase,” the Fed stated.

Dallas
Next up was the 11th District, where the auto market picked up in late February and remained strong the next few weeks.

“Contacts noted that customer concern over gas prices remains muted at this point, but they have seen more interest in smaller vehicles recently. The outlook for sales remains optimistic,” the Fed stated.

It also pointed that the car business was among the “scattered reports of small employment increases” seen in various industries throughout the district.
Additionally, cars were among the industries pushing up orders in high-tech manufacturing.

San Francisco
Lastly, the 12th District experienced good health in both the new- and used-vehicle markets. And since gas prices were rather high, fuel-efficient rides on the new-car side showed “especially strong growth.”