Upbeat Consumers Push Auto Sales Higher in December and for the Year

Auto dealer's lot
Auto dealer's lot

The nation's automakers ended 2010 on an upbeat note with most reporting higher sales for December and for the year on Tuesday. The lone exception was beleaguered Toyota Motor (TM), which saw its sales fall 5.5% last month compared to a year ago and end flat for the year, as consumers steered clear of the Japanese carmaker and its numerous recall woes.

General Motors (GM) and Ford Motor (F) both recorded single-digit percentage increases for the month, while Chrysler Group said its sales rose 16%. For Ford, which edged out Toyota for second place in sales nearly every month last year, 2010 proved to be a bang-up year. The automaker recorded a 19% increase in sales overall in 2010.

The increase were driven largely by stronger demand by consumers who seemed to put concerns about the U.S. economy on hold in December. The gain in retail sales helped offset reduced demand by fleet customers, such as corporations and rental-car companies, which several automakers reported fell in December compared to 2009.

"The Trajectory Is Positive"

With an expectation of total sales last year of about 11.5 million, the U.S. auto industry saw demand rise around 10% compared to 2009, one of the worst years for auto sales in recent memory. Though demand rose in 2010, the year is expected to go down as the second worst U.S. sales year since 1982.

"It's certainly an increase, and I think that the mood is upbeat and consumer demand is recovering," Jesse Toprak, senior analyst at TrueCar.com told DailyFinance. "It all depends on perspective, but clearly the trajectory is positive."

The pace of sales in December translates to about 12.34 million units in annual sales after accounting for seasonal variations, according to forecasts by Edmunds.com. Should that estimate hold, December will go down as the busiest for the nation's auto dealers since the federal government's "cash for clunkers" program in August 2009.

That enthusiasm was evident in automakers' own assessments of their results. GM's Don Johnson, who oversees U.S. sales for the Detroit auto giant, called the company's December's results "very solid," in a conference call with investors and the media following release of the sales data. "It ended up being our best total sales month of the year," Johnson said.

GM said its sales rose 7.5% overall and 15.5% among its core Chevrolet, Buick, Cadillac and GMC brands. For the year, GM's overall sales rose 6.3%, while among its core brands demand rose 21%. GM's four brands sold 118,435 more vehicles last year than it did with eight brands in 2009, the company said, adding it expects to gain total and retail market share for the year.

Chrysler Has a Strong Showing

Ford said its sales rose 7% for the month on strong demand for several models, including the newly redesigned Ford Explorer SUV, which saw sales double in its first month on sale compared to the model it replaced. Demand was also strong for the Ford Fusion family sedan and the company's familiar line of F-Series pickup trucks.

Chrysler, the smallest of U.S. automakers, said it sold 100,702 vehicles in December, a 16% increase above the 86,523 units it sold a year ago. For the year, the Auburn Hills, Mich.-based company said it sold 1.085 million units, a 17% rise from the full year 2009.

"We are extremely proud of the sales strides we made during this transition year," said Fred Diaz, the company's lead executive for U.S. sales. "Chrysler Group launched 16 all-new or significantly improved models last year, most of them during the fourth quarter," Diaz said, adding those new-model introductions should help boost sales in coming months.

Within its divisions, Chrysler noted that sales of Ram trucks and Jeep models were the most improved, up 87% and 49%, respectively, compared to a year ago. Those gains helped offset sales slippages at the company's Chrysler division, down 28%, and its Dodge brand, off 6%.

Some Bright Spots for Toyota

Toyota, however, saw demand for several of its most popular models, including the Toyota Corolla and Camry, fall in December. Corolla sales dropped by more than a third, the automaker said, even as sales of the company's iconic Prius gas-electric hybrid jumped by nearly that much.

The recently redesigned Sierra minivan and several sport-utility vehicles also recorded significant sales gains in December. For the year, Toyota said it sold 1.763 million cars, trucks and utility vehicles in the U.S., virtually unchanged from the 1.77 million it sold in 2009.

Honda Motor (HMC), the nation's fourth-largest automaker, said its sales rose 21% in December and recorded an overall 6.9% advance for the year. Nissan Motors (NSANY) said its December sales rose 28% for the month and 18% for all of 2010. Niche Japanese automaker Subaru also reported much improved sales in December and for the year, as did Mazda Motor, which recorded an 18% jump in sales last month and more than 10% for the year.

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South Korean automaker Hyundai Motor reported sales rose 33% in December and 24% for the year, leading the company to its best sales year yet. Hyundai said it sold 44,802 vehicles in December compared to 33,797 a year ago, driven in part by strong demand for the redesigned Sonata midsize sedan, sales of which climbed 52% to nearly 16,000 units. For the year, Hyundai said it sold 538,228 units in the U.S.

The news was similar from Hyundai affiliate Kia Motors where December sales leaped 45% to 30,444 as buyers snapped newly introduced Sorento and Sportage SUV models as well Forte compact cars. For the year, Kia said it sales rose 18.7% to more than 356,000 units.

German automakers Volkswagen, Mercedes-Benz and BMW each reported sales gains for December and the year in the U.S. market. BMW and VW both said sales rose about 17% last month compared to a year ago. VW's gains were driven by increased demand for Touareg, Routan and Tiguan utility vehicles as well as the Jetta compact sedan.

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