``(January) was like a sprinter out of the starting blocks,''
said Mike Jackson, CEO of AutoNation Inc., the country's largest auto
dealership chain.
Analysts said it will likely be the best January in five years
once all automakers report. Sales at Toyota rose 27 percent, and they
were up 22 percent at Ford. GM and Chrysler each reported 16 percent
gains compared with a year earlier.
The figures so far show that the auto industry remains a bright spot in a tepid U.S. economic recovery.
The results left the industry optimistic about the new year.
Businesses bought more trucks. Consumers _ whose cars have reached a
record average of 11.3 years old _ are ready to buy, and banks are
making it easier with low interest rates and looser credit terms.
The stock market may also have inspired car buyers _ the Standard
& Poor's 500 index had its strongest January since 1997. Also,
employers have been hiring at a steady if not spectacular pace.
``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.''
Whatever the incentive, people didn't let chilly weather, or the heavier hand of the U.S. Treasury, stop them from car shopping.
Chrysler estimated that total U.S. industry sales hit an annual
rate of 15.5 million in January. If that holds for the rest of the year,
automakers will sell 1 million more vehicles than in 2012, when sales
rose 13 percent.
The strong January numbers came even though higher Social
Security taxes cut take-home pay for most Americans. Taxes rose after a
2-percent cut in Social Security taxes, in place for two years, expired
Jan. 1.
January sales might have been even higher without the tax
increase, said Jesse Toprak, vice president of industry analysts at the
car pricing site TrueCar.com. He said the increase is costing the
average new car buyer _ those with a household income between $70,000
and $100,000 per year _ around $300 per month.
``That's almost a car payment,'' he said.
Analyst forecasts for 2013 are in the 15 million to 15.5 million
range. Although still far from the recent 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 at least three decades.
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. 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 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. Those gains give a strong
indication that businesses are replacing aging pickup trucks that they
kept through the Great Recession.
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.
Analysts say sales for the month should exceed 1 million vehicles
and are likely to be 8 percent to 15 percent higher than a year
earlier.
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.
Buyers crowded dealerships even though incentives weren't as good
as last year. The auto industry spent 8 percent less on discounts last
month than it did a year earlier, according to TrueCar.com. Of all major
automakers, only Hyundai and Volkswagen raised incentives from what
they spent in January of 2012, TrueCar said.
But that could change later in the year as automakers are expected to compete for sales with new vehicles and better deals.
Other automakers reporting sales Friday:
_ Nissan's sales rose 2 percent. Sales of the newly redesigned
Pathfinder SUV, which went on sale in November, more than tripled over
last January. The new Sentra also saw big sales gains.
_ Hyundai's sales rose 2 percent, with a 24 percent increase in
Elantra small car sales helping outweigh an 8 percent decline for the
midsize Sonata. Hyundai said it was a record January for its U.S. sales.
_ Volkswagen's sales grew 7 percent. That was slower than the
company's 31-percent sales growth last January, but it was still the
company's best January in the U.S. since 1974. Passat midsize sedan
sales rose 40 percent.