Automakers seeing signs of prosperity

DETROIT – 2012 is already looking like a winner for automakers – just one month into the year.

U.S. sales of new cars and trucks rose 11 percent to 913,287 in January. New models, low interest rates and better loan availability helped buyers overcome lingering worries about the economy and pushed the sales pace to its highest level since the Cash for Clunkers program in August 2009.

Chrysler had its best January in four years, with sales jumping 44 percent in part because of a surge in demand for its revamped 200 and 300 sedans. Toyota and Honda were back in the game, getting boosts from important new vehicles. Volkswagen, which wants to aggressively expand in the U.S., reported big increases. The only loser among the major automakers was General Motors Co., whose sales fell 6 percent from a strong January last year.

“For the first time in several years, we are starting the year off with a warm and fuzzy feeling,” said Jesse Toprak, vice president of industry trends for TrueCar.com.

January’s sales pace was even faster than December’s, a relief for the industry after a bumpy 2011. Sales started at a healthy pace last year but plummeted after the Japanese earthquake in March caused car shortages and didn’t recover until the final four months of 2011.

If sales stay at the same pace as this January, they would reach 14.2 million, up from 12.8 million in 2011, according to Autodata Corp. While that’s below the 2000 peak of 17.3 million, it’s better than the 10.4 million through in 2009.

One reason car sales are improving is that buyers need to replace aging vehicles. The average age of a vehicle in the U.S. is a record 10.8 years, nearly two years older than a decade ago.

David Whiston, auto equity analyst for Morningstar, said buyers will have plenty of options this year as Toyota and Honda recover and automakers launch major new products like the Dodge Dart and new versions of the Honda Accord and Ford Fusion.

“It will be a great time to be a consumer going into 2012,” Whiston said.

But he cautions that buyers shouldn’t expect big price breaks, since there are so many new products and companies are closely guarding their profits.

Buyers paid an average of $31,312 for a new car in January, including an average incentive of $2,206, according to Edmunds.com. Five years ago, buyers were getting about the same amount in incentives, but the average vehicle price was $27,966.