GM, Toyota lead January car sales jump

DETROIT – Automakers reported double-digit U.S. sales increases in January, a sign that car sales didn’t spin out even with a major snowstorm hitting the Northeast.

General Motors led the way with an 18 percent gain over last January. Encouraged by low gas prices, buyers snapped up GM’s big SUVs like the Chevrolet Tahoe and GMC Yukon.

Toyota’s sales rose 16 percent, and the Japanese automaker reported record January sales of its trucks and SUVs. Ford and Nissan each posted 15 percent gains. Fiat Chrysler’s sales rose 14 percent and Honda’s sales were up 12 percent.

U.S. sales of new vehicles were expected to be strong in January, continuing the brisk pace of the last half of 2014. Kelley Blue Book predicted overall sales will rise 13 percent to 1.14 million vehicles, making this the best January in nine years.

All automakers except Tesla Motors reported U.S. sales results Tuesday.

January is typically a slow month for the auto industry. Buyers have less incentive to shop, since automakers offer fewer deals and promotions after the holidays and tax bills are looming. Bad weather can also keep customers away.

But this January was a big improvement over last year, when the polar vortex caused record-setting cold in much of the country. This year’s Northeast blizzard had no real impact on sales, Ford’s U.S. sales analyst Erich Merkle said.

Gas prices continued to fall in January, hitting a six-year low of $2.03 per gallon on Jan. 26, according to AAA. That gave consumers the confidence to choose bigger vehicles.

Trucks, vans and SUVs were expected to account for 55 percent of sales to individual buyers in January, the highest percentage since 2004, according to the forecasting firm LMC Automotive. Sales of behemoths like the Cadillac Escalade and Lincoln Navigator more than doubled.

Pickup truck sales also correlate closely to home construction, and new home construction rose sharply in December.

While incentives fell 10 percent from December, to $2,642 per vehicle, they were still about 4 percent higher than last January, according to car shopping site TrueCar.com. That trend could continue; as the pace of growth slows, automakers may have to offer more deals to protect their market share.

Analysts expect U.S. sales to increase this year but at a slower pace than in recent years as sales approach 17 million, their highest level in a decade.

Stable home values, an abundance of credit and low interest rates are all fueling the demand, along with low gas prices.

“If those factors remain in place, new vehicle sales will continue to rise, though a big shift in one or more could quickly slow things down,” said Karl Brauer, a senior analyst with Kelley Blue Book.