Toyota, Detroit hit best U.S. mark in five years
DETROIT – American consumers ignored tax increases and trudged through winter weather to buy new cars and trucks at an unusually strong pace last month. It was the auto industry’s best January since 2008.
“It was like a sprinter out of the starting blocks,” said Mike Jackson, CEO of AutoNation Inc., the country’s largest auto dealership chain.
U.S. auto sales rose 14 percent to more than 1 million. Toyota’s 27 percent gain was the biggest among the major car companies. Ford’s sales jumped 22 percent, while GM and Chrysler each reported 16 percent gains compared with a year earlier.
The results left the industry optimistic about the new year. Businesses bought more trucks. Consumers are ready to buy – their cars have reached a record average of 11.3 years old – and banks are making it easier with low interest rates and looser credit terms.
“We’re in a fundamentally sound trajectory,” said Mustafa Mohatarem, chief economist for GM. He said the recovery from the Great Recession in 2008 is still modest, but “those recoveries tend to be much more sustainable.”
Analysts predict full-year sales of 15 million to 15.5 million this year. Although still far from the peak of about 17 million in 2005, the industry could sell a whopping 5 million more cars and trucks than it did in 2009, the worst year in three decades.
Toyota sales jumped on the strength of the Prius hybrid cars and wagon, which rose 36 percent, and the new Avalon sedan, which was up 50 percent. The luxury Lexus brand climbed 32 percent on strong sales of the new ES and GS sedans.
At Ford, January’s sales growth was led by the newly redesigned Fusion midsize car, which saw a 65 percent increase. Explorer SUV sales rose 46 percent. Ford’s luxury Lincoln brand fell 18 percent.
Sales of the F-Series pickup truck, the top-selling vehicle in the U.S., rose 22 percent. GM’s Chevrolet Silverado and GMC Sierra pickups each saw increases of over 30 percent while sales of the Ram pickup, Chrysler’s top-selling vehicle, rose 14 percent from a year earlier.
Kurt McNeil, GM’s vice president of sales operations, said the company noticed a 37 percent increase in sales to small businesses like building contractors, who normally buy pickup trucks.
Jackson, whose chain reported record fourth-quarter earnings on Thursday, feared a hangover last month from the strong finish to 2012. But he said people who focused on paying down debt the past few years are now making big-ticket purchases at a robust pace.
Consumers are saying: “I’m moving ahead with my life. I’m getting a new vehicle,” Jackson said.