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VOL. 127 | NO. 22 | Thursday, February 2, 2012

US Auto Sales Rise in January, Led by Chrysler, VW


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DETROIT (AP) – U.S. auto sales are off to a strong start this year, continuing their brisk pace from late 2011.

Chrysler had its best January in four years while Toyota got a boost from its new Camry. Volkswagen, which wants to aggressively expand in the U.S., reported much higher sales. One sour note was GM, where sales fell compared to a strong January a year earlier.

When final figures are released late Wednesday, analysts expect industrywide sales to rise around 7 percent to more than 870,000 for January, kicking off what is expected to be the strongest year for the industry since the recession. Jesse Toprak, vice president of industry trends for TrueCar.com, said demand is growing as the economy improves.

"For the first time in several years, we are starting the year off with a warm and fuzzy feeling," Toprak said.

January's sales pace was expected to be about the same as December's, a relief for the industry after a bumpy 2011. Sales started at a healthy pace last year but plummeted after the Japanese earthquakes affected vehicle supplies. The pace of sales didn't really recover until the last four months of 2011.

For all of 2012, auto sales could reach close to 14 million new vehicles, analysts say, up from 12.8 million in 2011. While that forecast is below the 2000 peak of 17.3 million, it's better than the 10.4 million trough in 2009.

One reason car sales are improving is that buyers need to replace aging vehicles. The average age of a vehicle in America has reached a record 10.8 years. Low interest rates and greater loan availability also spurred demand in January.

Unseasonably warm weather may have drawn buyers to dealerships, although Ford's U.S. sales chief Ken Czubay said that the weather effect was probably a wash. Frigid weather can also boost sales because older cars may not start during a cold snap, he said.

Chrysler's January sales jumped 44 percent, led by surge in demand for the Chrysler brand. Buyers flocked to the revamped 200 and 300 sedans. Chrysler sold 7,007 of the 200 midsize sedan last month, more than eight times the number it sold in January of 2011. Sales of the Chrysler 300 large sedan almost quadrupled from a year earlier.

Chrysler reported January sales on the same day it announced its first full-year net income since 1997.

Sales at Toyota Motor Corp. rose 7.5 percent on strong demand for the new Camry, which went on sale last fall. Camry sales rose 56 percent in January and the sedan remained America's best-selling car. Sales of the Prius hybrid rose 9 percent.

Ford Motor Co.'s sales rose 7 percent. Demand for the Ford Focus compact car rose 60 percent, while sales of the Escape small SUV rose 24 percent. Ford is replacing the Escape with a new version later this year, and sales have been strong for months as dealers offer big discounts to clear out the old models.

General Motors Co.'s sales fell 6 percent as demand for its trucks and crossovers fell. One problem: GM is no longer making the HHR crossover, which contributed more than 7,300 sales to its bottom line last January.

GM also compared unfavorably to last January when its sales were inflated by rebates and other deals. TrueCar estimated that GM's incentives were down 16 percent to $3,095 per vehicle this year. Don Johnson, GM's vice president of U.S. sales, said the company's sales also will likely be down in February because of the incentives it offered last year.

Still, GM's car sales rose 13 percent, led by the new subcompact Chevrolet Sonic and the Chevrolet Cruze.

Sales of the Volt electric car nearly doubled to 603. But that was less than half the number sold in December and less than the sales of rival Nissan Leaf. Volt sales were affected by the government hearings into Volt battery fires, and GM's announcement in early January that it will retrofit existing Volts so they are less prone to fires after a severe crash, Johnson said. The company expects sales to pick up soon.

Analysts expect that new car and truck sales hit a seasonally adjusted annual rate of 13.5 million vehicles in January. That follows an annual rate of 13.56 million in December and 13.63 million in November.

The industry faces some challenges. Consumer confidence fell in January after two straight months of big gains as Americans worried about incomes, gas prices and business conditions. Unemployment is at its lowest level in nearly three years, but it's still 8.5 percent.

"Overall, the economy's not in a good place yet, but I think consumers are reacting to the conditions much more favorably than expected," said Jeff Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting company in Troy, Michigan.

Other companies reporting sales Wednesday:

  • Volkswagen of America reported a 48 percent rise in U.S. sales, led by the Jetta and Passat sedans.
  • Nissan Motor Co.'s sales were up 10 percent with big jumps for the new Quest minivan and the Altima sedan. Nissan sold 676 Leaf electric cars, besting its archrival, the Chevrolet Volt.
  • Hyundai Motor Co. continued its string of sales increases, setting a company record for a January. The Korean automaker's sales rose nearly 15 percent. The Sonata midsize car led the way with sales up 9 percent.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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