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Automakers Start Year with Strong Sales

February 1, 2012
3 min to read


Car sales zoomed ahead in January, with many automakers reporting solid sales at the start of a year expected to show a steady gain in vehicle purchases.


Chrysler, now privately held and majority owned by Italy’s Fiat, was the notable standout for the month. It posted a 44 percent rise in U.S. auto sales, led by gains for its Jeep brand, while its larger domestic rival General Motors lost ground in a month marked by modest growth, according to msnbc.com.

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Chrysler’s sales blew past some analysts’ expectations of a 35 percent increase, demonstrating the remarkable comeback of the smallest U.S. automaker nearly three years after its taxpayer-funded bankruptcy restructuring. It also reported its first full-year profit since 1997.


GM, the largest U.S. automaker, reported a 6 percent drop in U.S. auto sales for the month, while Ford posted sales that were 7 percent higher, spurred by a 60 percent jump in sales of the Focus small car.


Japan’s Toyota said its January sales in the U.S. rose 7.5 percent as momentum from the fourth quarter of last year picked up speed.


U.S. auto sales, an early indication of consumer demand each month, are expected to show an overall rise of 6 percent in January. Older cars, which now average a record 11 years old, are helping to boost new car sales as people trade them in after delaying purchases during the economic downturn.


As drivers replace their aging cars, new car sales are expected to grow through at least the start of 2012. At the same time, used vehicle prices have jumped compared to new car prices, which could drive car buyers to purchase a new car over a used one. Ford economist Jenny Lin said low interest rates as well as stable gasoline prices are also supporting vehicle sales.

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So far, the annualized sales rate for January, traditionally a tepid month for auto sales, is tracking at 13.8 million vehicles, JP Morgan analyst Himanshu Patel said in a research note. This surpasses the 13.5 million sales rate that analysts had expected and is slightly higher than the nearly 13.6 million sales rate reached in December.


GM was expected to show a decline in sales compared to last January, when the automaker offered consumer incentives to jump-start sales. It has since pulled back from this approach.


“The old days of going blindly after market share are over, and most manufacturers are now concentrating on what really matters, which is profitability,” said Jesse Toprak, TrueCar.com analyst.


GM sales totaled 167,962 vehicles in January. The carmaker predicted that light vehicle sales in 2012 would range from 13.5 million to 14 million.


Some analysts had expected GM to report a 9 percent drop.

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“In 2012, we will strengthen our position with more new products, an even better dealership experience and reinforce the disciplined ‘go to market’ strategy that helped us grow profitably in the United States in 2011,” GM’s U.S. sales chief Don Johnson said in a statement.


Volkswagen and Nissan reported sales gains for January. VW sales rose 48 percent to 27,209 vehicles, buoyed by the introduction of its Passat sedan. It was the German automaker’s best sales month in decades. Nissan’s U.S. sales rose 10.4 percent to 79,313.


During a call with reporters, Jonathan Browning, chief executive of VW in America, said U.S. consumer confidence was growing, but not a swift rate.

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