Strong U.S. sales in December capped a remarkable year for the auto industry—especially Japanese brands—and 2013 should be even better.
Sales of new cars and trucks totaled around 14.5 million after all carmakers announced final figures in early January. That is 13% better than 2011 and the best performance in five years.
In 2012, Americans had plenty of incentive to buy new cars and trucks. The economy improved. Unemployment eased. Home sales and prices rose. And the average age of a car topped 11 years in the U.S., a record that spurred people to trade in. Banks made that easier by offering low interest rates and greater access to loans, even for those with lousy credit.
Year-end deals on pickup trucks and the usual round of sparkling holiday ads helped December sales jump 9% to more than 1.3 million, auto pricing site TrueCar.com predicted. That would translate to an annual rate of more than 15.6 million, making December the strongest month of 2012.
The top sellers, once again, were the Ford F series as the top truck, and the Toyota Camry on the car side. Both enjoyed healthy gains: Sales of the F series jumped 10% to 645,316; and the Camry soared 31% to 404,888.
Industry experts predict that the United States market would continue to grow to at least 15.5 million vehicles sold this year, and possibly higher, if housing and other economic factors continue to improve, the New York Times reported.
Ford predicts that industry sales could reach as high as 16 million vehicles in 2013 as more consumers trade in older cars and buy new, more efficient models. See more information on 2013 forecasting on page 45.
“For the industry, 2012 was mission accomplished,” said Jesse Toprak, an analyst with the auto research site TrueCar.com. “Companies are hitting their sales goals, and they are doing it with fewer incentives.”
“The U.S. light vehicle sales market continues to be a bright spot in the tremulous global environment,” said Jeff Schuster, senior vice president of forecasting for LMC Automotive, a Detroit-area industry forecasting firm.
Volkswagen led all major automakers with sales up a staggering 30.6% for the year, and 29.9% in December, led by the redesigned Passat midsize sedan. VW sold more than five times as many Passats last year as it did in 2011.
Toprak, vice president of industry trends for TrueCar, said VW has the right mix of value and attractive vehicles and called the company “the force to watch in the next several years in the U.S. market.”
Toyota, which has recovered from an earthquake and tsunami that crimped its Japan factories two years ago, said that sales jumped 26.6% for 2012. Its December sales were up 9%. Unlike 2011, the company had plenty of new models stocked in showrooms for most of last year. Toyota’s top sellers were the Corolla, Camry and Prius.
Subaru reported a record sales month in December, saying its December sales of 36,653 vehicles is the best sales month in its history. Subaru also announced record-breaking annual sales of 336,441, which represents a 26% increase over 2011. This is the fourth consecutive year of sales records for Subaru of America and fifth consecutive year of sales increases.
Annual sales for the Impreza increased nearly 150% over 2011. Year-to-date sales for the newly-refreshed Outback and Legacy models increased 13% and 11% respectively. The newly introduced BRZ and XV Crosstrek models also added 3,906 incremental sales for the month of December and 11,540 units for the year.
“We met our goals for the year and we crossed a new milestone by exceeding 300,000 annual sales,” said Thomas J. Doll, executive vice president and COO, Subaru of America, Inc. “It was a great year for Subaru of America. The popular XV Crosstrek, all-new 2014 Forester and an upcoming hybrid will fuel our growth in this new year.”
Honda sales rose 24% for the year and ended 2012 on a high note with a 26.2% jump in sales in December. Its bestsellers were the Accord and Civic.
Chrysler, the smallest of the Detroit carmakers, had the best year among U.S. companies. Its sales jumped 20.6%. December sales rose 10.4%, the strongest December sales in five years. Chrysler reported U.S. market share rose to 11.2% in 2012, up from 10.5% share in 2011.
The all-new Dodge Dart, which recently earned a Top Safety Pick from the Insurance Institute for Highway Safety, played a big role in Chrysler Group’s big sales increase in December. Dart sales were up 36% month-over-month in December, the compact car’s best monthly sales performance since it went on sale in June, with a sales total of 6,100 in December.
Also contributing to Chrysler Group’s 10% increase were the Fiat 500, Jeep Wrangler, Dodge Challenger, Dodge Journey, and Ram Cargo Van, each setting a sales record for the month of December. The Jeep Grand Cherokee, the most awarded SUV ever, recorded its best sales performance of the year in December.
The Jeep brand’s 13% sales increase in the U.S. helped push its global sales to an all-time record in 2012. Seven Chrysler Group models set annual sales records in 2012. The Chrysler, Dodge, Ram Truck and FIAT brands each posted year-over-year sales gains in December compared with the same month last year. The FIAT brand’s 59% was the largest sales gain of any Chrysler Group brand for the month, and set a sales record for the month of December.
“Looking back on 2012, we were again one of the fastest-growing automakers in the country with total sales up 21%. We also recorded 33 consecutive months of year-over-year sales growth and our strongest annual sales in five years. Finally, seven of our vehicles recorded their best ever annual sales in 2012, demonstrating how the quality, design and fuel efficiency of our product line up continues to resonate with consumers,” said Reid Bigland, President and CEO, Dodge Brand and Head of U.S. Sales.
Editors of Motor Trend named the new 2013 Ram 1500 the magazine’s 2013 Truck of the Year, and five Chrysler models received the 2013 Consumer Guide® Automotive ‘Best Buy’ Award: Dodge Grand Caravan, Journey and Durango; Chrysler Town & Country, and Ram 1500.
Nissan and Infiniti
Nissan and Infiniti sales were up nearly 10% as the Nissan brand topped 1 million in annual sales for the first time. But Nissan said its December sales dropped by 1.6%.
For the Hyundai brand, U.S. sales rose 17% in December, capping off a 9% sales increase for the full year to a record 703,007 vehicles, the Korean automaker’s best year in the U.S.
GM and Ford
But full-year sales at Ford and General Motors lagged. GM’s rose only 3.7% for the year, while Ford edged up 4.7%. For December, GM sales rose 4.9%, while Ford was up only 1.6%.
GM’s December increase was primarily because of new products like the Cadillac ATS sedan and higher incentives on its Chevrolet Silverado and GMC Sierra pickups.
The Detroit News reported that GM sales of the plug-in hybrid Chevrolet Volt tripled in 2012. U.S. sales of the Volt for 2012 will top 23,000 for the year, said Michelle Malcho, a spokeswoman for GM. Volt sales got a boost when California granted solo drivers access to carpool lanes. GM spokesman Jim Cain says 1-in-3 Volts are now sold in the Golden State. The company abandoned its 2012 U.S. sales forecast of 45,000, saying it would instead match supply to meet demand.
GM executives said the company has the oldest model lineup in the industry, yet it still posted a sales increase and commanded high prices for cars and trucks. The company plans to refurbish 70% of its North American models in the next 18 months and expects to boost sales this year.
Ford reported only a slight sales increase in December due to safety recalls for its new Escape SUV and Fusion sedan which saw a big drop in sales. However, the sales drop for those cars was mitigated by strong sales for Ford’s two smallest cars, the Focus and the Fiesta, both of which increased in sales by more than 50%. Ken Czubay, head of Ford’s United States sles and marketing, said the company’s small-car sales were its best in more than a decade.
While Ford didn’t match Toyota with the best-selling-car title, Ford did top two million U.S. sales in 2012 and can boast having a top-selling brand.
In December, Kia sales fell by nearly 10%, its first monthly decline in more than two years. Kia spokesman Scott McKee declined to comment on the reasons for the December sales decline.
But, despite the December hiccup, Kia sold a record 557,599 vehicles in the U.S. market last year, up 15% compared with the overall U.S. auto industry’s 13% gain.
After a relatively quiet year in 2012, Kia is poised for a big year on the new product front in 2013. In a statement, Kia Motors America CEO Byung Mo Ahn said the brand plans to launch seven new or reworked vehicles in the next 12 months.
BMW tops the U.S. luxury auto sales in 2012, with a reported sales increase of 34.7% in December. BMW can lay claim to the 2012 U.S. luxury auto sales crown for the second year in a row with an increase of 13.5% in sales over last year.
Also saw its best year ever for U.S. sales and came in second place for luxury sales with a 15.4% sales increase over 2011.
December featured year-end deals on big pickup trucks. GM offered discounts of up to $9,000 to help clear growing inventory. The move worked. GM cut its full-size pickup supply from almost 246,000 at the end of November to just under 222,000 as the year came to a close.
Overall, though, analysts said the industry eased up on promotions such as rebates and low-interest financing. Car and truck buyers paid an average of $31,228 per vehicle last month, up 1.8% from December 2011.
Auto sales in 2013 will be even stronger, predicts an auto industry research firm. The firm says a healthier economy and more new model introductions should push U.S. auto sales above the 15 million mark this year.
The Polk research firm joins many other analysts in predicting 2013 sales at or above 15 million. The consulting firm LMC Automotive, for instance, expects 2013 sales of around 15 million, up from 14.5 million in 2012.
Polk says auto sales should continue to lead the country’s economic recovery, rising nearly 7% over 2012 to 15.3 million new vehicle registrations. Polk, based in Southfield, MI, expects 43 new models to be introduced, up 50% from last year. New models usually boost sales. All eight of the top manufacturers are strong and introducing new vehicles, and that should bring competition and lower prices in those segments, according to Tom Libby, lead North American analyst for Polk.
Polk predicted a handful of other trends for 2013. Sales will grow for big pickups, which are very profitable for automakers. Demand has been depressed for five years due to the weak economy, but should get a lift in 2013 thanks to redesigned trucks from GM, Toyota and Ford.
Polk also said the midsize sedan segment will continue to lead the industry. It’s now at 18.5% of the market, 2 percentage points larger than any other type of segment.
“Recent redesigns of nearly every vehicle in the midsize segment are forcing more competition and continued growth,” said Libby.
Polk does not expect pre-recession sales levels of 17 million for several more years, said Anthony Pratt, Polk’s forecasting director for the Americas. Auto sales peaked at about 17 million in 2005, but dropped to 10.4 million in 2009, the lowest level in more than three decades.
But Polk’s optimistic forecast firm hinges on Washington reaching an agreement on spending cuts, which could happen later in the year. On New Year’s Day, congress approved a compromise to avoid the so-called “fiscal cliff.” The deal raises taxes for incomes exceeding $400,000 for individuals and $450,000 for couples. But it delayed action on dramatic federal spending cuts and debt, setting up another showdown in a divided Congress.