Though auto dealers reported varying sales results from region to region during the early part of 2012, one thing seems fairly clear: the prospects for the future looks bright.

In fact, the Federal Reserve noticed widespread optimism among dealers in its latest Beige Book report

“All districts reporting on sales outlooks conveyed optimism,” the Fed noted.

Among the 12 Federal Reserve Districts, Philadelphia, Atlanta, St. Louis and Minneapolis posted sales increases, while Chicago had a mixed bag.

“Chicago also reported sales increases in January, but noted that sales were down slightly in early February,” officials noted. “Auto dealers in the New York,
Cleveland and Richmond Districts reported a slowdown in recent auto sales, while auto sales held steady in the Dallas District and contacts in the Kansas City District reported a post-holiday lull in sales.”

The Fed shared more about each region in its report and broke down the auto market in each, beginning with the First District.

Boston

In this area, the Fed did not report any auto-specific data, but officials noted that overall, “First District retailers responding in this round report that business conditions in early 2012 have continued the improvement seen in the fourth quarter.”

They added: "Retail respondents expect the U.S. economy to improve further in 2012. While remaining a bit cautious, they all note that economic conditions seem more favorable than last fall.”

New York

Moving over to the Second District, the Fed found some mixed trends. It noted that upstate New York showed some slowdown in January, even with favorable weather.

“Sales of new vehicles were down 3-5 percent from a year earlier, though the weakness was not quite as pronounced as the figures suggest because January 2011 was a particularly strong month for comparison,” officials noted.

Additionally, dealers have more access to inventory and aren’t being hampered as much by shortages.

Sharing some more specifics, the Fed noted that dealers in the Rochester area are seeing strong used sales. However, Buffalo-area dealers are struggling in that department.

In some good news for the district, it is continuing to see “favorable” wholesale and retail credit conditions.

Philadelphia

Over in the Third District, dealers enjoyed continued strength during the reporting period. Sales for dealers in Pennsylvania were particularly healthy.

“New Jersey dealers had a stronger December, which may have pulled sales forward from January; this was in part due to financial-sector workers spending their year-end bonuses,” officials explained.

Looking forward, it is expected sales will continue to be “very strong” in this region. What’s more, bigger dealers have been making hires, with sales positions as the primary focus.

“More hiring is expected if robust sales continue into the spring season,” the Fed added.

Cleveland

Next up, the Fourth District showed the typical new-vehicle decline during January, although sales did increase a bit from the year-ago period. The inventory situation is mixed, with some dealers saying they have high but “manageable” supply, while others are still being challenged by low inventories.

“The outlook for 2012 was generally optimistic. However, several of our contacts were uncertain about whether or not the sales increases seen during 2011 would be repeated this year,” the Fed pointed out.

On the used side of the market, sales climbed, however, dealers were still challenged by low supply, and used prices also climbed.

“On the financing side, interest rates remain competitive, and at the same time it is difficult to arrange financing for customers with low credit scores,” officials reported. “Auto dealers looking to hire reported that it is not easy to find qualified candidates, especially sales representatives and service technicians.”

Discussing more financing items, the Fed said that “auto lending (direct and indirect) continued to show strength.” 

Noting some good news on the manufacturing front, the Fed pointed out that January vehicle production jumped significantly month-over-month and year-over-year.

“Increases were attributed, in part, to the abatement of supply chain issues,” it shared.

Richmond

Further South, the Fifth District showed a “generally flat” retail market for big-ticket items. The state of the market looks somewhat mixed for dealers.

“Auto dealers in South Carolina and Maryland experienced a slowdown in sales since our last report,” the Fed noted. “In contrast, a car dealer near Washington, D.C. said that his establishment was hiring more sales associates to handle the increase in customer traffic and sales.”

Atlanta

The warm weather in the Sixth District gave dealers a shot in the arm during January, the Fed shared. And the outlook for coming months looks bright, as well.

“Auto dealers noted that the warm weather experienced in January likely boosted sales for the month, and they anticipate new vehicle sales to continue to improve,” officials explained.

In another tidbit of positive news for the district, it was revealed that three automakers with facilities in the region plan on boosting production. Meanwhile, another OEM said it will move a parts manufacturing plant there.

Additionally, the Fed shared: “Bankers also reported increased consumer lending attributed mainly to auto financing.”

Chicago

Despite sales dipping a bit early last month  (due partly to lower incentives) after an uptick in January, the Fed said the auto industry was “a source of strength” yet again in the Seventh District.

“Contacts expected that auto sales in 2012 would hold near the pace seen in January, which, while still below pre-recession levels, would mark another year of recovery for the industry,” it explained.

Expanding upon overall business spending during the period, the Fed added: “Most retailers indicated their inventories were at comfortable levels. However, a number of auto dealers continued to report lower than desired levels for some models.”

Officials also pointed out that subprime auto lending saw more available credit.

St. Louis

In the St. Louis region, auto sales climbed modestly year-over-year in the first two months of 2012. Breaking it down, the Fed offered the following data from surveyed dealers:

—48 percent increased sales
—32 percent were down
—20 percent were flat

“Twenty-eight percent of the car dealers reported that used-car sales had increased relative to new-car sales, while 24 percent reported the opposite,” the Fed explained. “Thirty-two percent of contacts reported an increase in sales of low-end vehicles relative to high-end vehicles, while 8 percent reported the opposite.”

On the inventory front, about a third (32 percent) believed they did not have enough inventory. About a quarter (24 percent) said they had too much.

Looking forward, dealers outlook on March and April is “mostly optimistic,” as more than three-fourths (76 percent) are anticipating a sales upswing.

The Fed also counted firms in the auto manufacturing sector among those planning on hiring and bolstering existing operations.

Minneapolis

Moving on to the Ninth District, the Fed had this to say about the auto business here: “A representative of an auto dealers association in Montana noted that recent vehicle sales were higher than a year ago and that availability of new and used cars has improved.”

Kansas City

Following the holidays, auto sales became softer in the 10th District. This “post-holiday lull” led to increased inventory. Supply was particularly high for SUVs and pricier cars.

“However, auto dealers expected stronger demand for smaller, fuel efficient cars would spur sales in the coming months,” the Fed stressed.

“Some dealerships were hiring salespeople and service technicians,” it added.

Dallas

Next up, the 11th District enjoyed stable auto sales, though it was found that used-vehicle side “remained tight.”

“Vehicle inventories were somewhat lighter than normal,” the Fed pointed out. “Expectations are for moderate increases in new-car sales this year.”

It also was discovered that some dealers saw employment numbers go up a bit.

San Francisco

Though not offering any specific automotive data, the Fed said the retail market, in general, for the 12th District “continued to expand.”

Overall, the Fed said this of the region: “Economic activity in the Twelfth District continued to grow at a moderate pace during the reporting period of January through mid-February.”