U.S. auto sales maintained the strong upward trend that delivered a solid send-off to 2012, with most major manufacturers reporting double-digit gains for January.
A number of manufacturers set new sales records during the first month of 2013, and Detroit makers, in particular, recovered some much-needed momentum. Two of the Detroit Big Three ended last year with market share declines.
Industry observers credit a variety of factors for driving strong demand last month, including an improving economy and a bump in the long-struggling housing market. Notably, January saw demand surge in a variety of different segments, from high-mileage small cars and hybrid vehicles to full-size pickups.
?We?re in a fundamentally sound trajectory,? said Mustafa Mohatarem, the chief economist for General Motors. While the industry is still operating well behind the record 17 million-plus rates experienced during the middle of the last decade, he suggested the modest but steady recovery the industry has been experiencing this cycle ?is much more sustainable? than some of the rapid rebounds of decades past.
Though General Motors did see a rise in sales last year, the maker couldn?t keep up with the overall increase in U.S. demand, watching its market share slip from 18.4 percent in 2011 to 16.9 percent. Senior company officials, including CEO Dan Akerson, have forecast a modest improvement for GM this year, and the maker?s 16 percent jump in January appears to put it on an upward trajectory.
Detroit makers, on the whole, appear to have fared well for the month, with Chrysler also gaining 16 percent and marking its 34th consecutive month-over-month sales gains. The maker scored gains at all of its various brands ? and also saw a jump in demand for the Dodge Dart, a critical new compact model that has lagged in showrooms in recent months, something Chrysler CEO Sergio Marchionne has blamed on a lackluster powertrain lineup.
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Ford, meanwhile, saw January numbers increase by 22 percent. Ken Czubay, the maker?s chief of U.S. sales, suggested that the company's heavy investment in new products and powertrains ?continues to pay off.?
Ford?s results reveal that the January industry upturn was a broad one. Ford?s small car sales jumped 29 percent, while its various hybrid models were up approximately 350 percent. The midsize Ford Fusion had its best January ever. But the full-size F-Series pickup also gained ground.
Pickups have been especially strong in recent months, even as the overall share of small and alternative-powered vehicles has gained steady ground. That?s little surprise, according to analysts such as Joe Phillippi, of AutoTrends Consulting, who track a close, historic link between the housing market and truck sales. Demand for pickups has also gotten a lift as the East Coast continues to dig out from the devastation of Superstorm Sandy.
Detroit makers aren?t the only ones celebrating January?s sales results. Toyota reported a 27 percent year-over-year increase. "The sales pace we saw in the fourth quarter of last year rolled into January, exceeding our expectations for the industry,? said Bill Fay, general manager of the Japanese maker?s mainstream brand.
The other members of the Japanese Big Three didn?t fare quite so well. Nissan gained a modest 2 percent for the month, that increase largely driven by the latest incarnation of the Pathfinder ? which has migrated from a traditional, truck-based platform to a more nimble and fuel-efficient crossover design.
American Honda reported an overall 12.8 percent gain, though its Acura luxury brand did a wee bit better with the assistance of new products such as the entry luxury ILX.
Luxury makers, in general, did well ? but could have done better, some analysts said. Mercedes-Benz gained 11 percent over year-earlier levels, while Audi was up nearly 6 percent -- but both reported records for January.
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BMW was up a modest 2.3 percent after finishing 2012 as the nation?s best-selling luxury brand. Some observers suggest the maker?s aggressive end-of-year marketing may have ?pulled forward? sales that might have otherwise been rung up in 2013.
But Jesse Toprak, auto analyst with data tracking firm TrueCar.com, also said that the new tax increases on wealthy buyers may be having a measurable impact on high-line brands going forward.
TrueCar data indicate that buyers actually paid a slight bit less for the average vehicle sold in January, at $30,812, compared with December. But the average transaction price was nonetheless up by $416, or more than 1percent year-over-year.
Meanwhile, with demand helping makers maintain steady production schedules on most key products, they?ve been able to continue a year-long reduction in rebates and other incentives. For the month, such givebacks slid to just $2,274 per vehicle, down from $2,591 in December and $2,481 in January 2012.
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Only a few automakers increased givebacks, notably Hyundai, which saw a weak 2 percent gain in sales in January. Like several other makers, however, the Korean brand has warned it could face production-driven limits to its sales if the market continues to heat up too quickly.
Earlier this week, AutoPacific, Inc. predicted the U.S. market would climb to 15.1 million this year following last year?s jump to 14.5 million. But the California-based consulting firm is among the more conservative. Chrysler officials indicated they see a 15.5 million total for 2013 if current trends hold.
Whether they can, of course, is far from certain. The U.S. economy is clearly gaining momentum but there are a variety of ?headwinds,? industry insiders caution. That includes the ongoing rise in petroleum prices ? which could climb even faster in the wake of the explosion at Mexico?s national oil company headquarters and the terrorist attack on the U.S. embassy in Turkey this week.
There?s also the ongoing drag from the European economy. Car sales there fell to their lowest level since 1995 last year and few expect any improvement in 2013. With China also slowing, officials with foreign manufacturers, such as Toyota?s Fay, have said they will be putting even more emphasis on the North American market in the months ahead.
After the sharp cutbacks of the recent recession, the auto industry could translate improved cost-efficiencies into record profits this year ? but should makers decide to battle it out by ramping up incentives, analysts warn, that could stall the ongoing recovery at the bottom line level.
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Copyright 2013 The Detroit Bureau
Source: http://www.nbcnews.com/business/chrysler-posts-highest-january-sales-five-years-1B8209091
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