Auto sales start 2011 on a strong note

By Ben Rooney, staff reporter


NEW YORK (CNNMoney) -- The nation's automakers posted double-digit percentage sales gains for January on Tuesday, as Americans appear to be returning to showrooms after a long hiatus.

General Motors, Ford and Chrysler Group all reported sales figures that matched or exceeded analysts' expectations. The gains were driven by sales to retail customers, who were undeterred by severe winter storms in many part of the country in January.

Industrywide, U.S. sales rose 17% in January, an annual sales pace equal to 12.6 million vehicles when seasonal factors are taken into account, according to sales tracker Autodata. About 820,000 total vehicles sold in the month, which is the best January tally in three years.

"You can't get those kind of numbers without consumer demand," said Jesse Toprak, vice president of industry trends at TrueCar.com.

January is typically a slow month for auto sales, and the robust performance last month raised hopes that 2011 could mark a turnaround for the auto industry.

"The very positive sales news being issued by many automakers today is further proof of the suspected thaw in this once-frigid sector of our general economy," said James Bell, a market analyst at Kelley Blue Book's kbb.com.

But the industry is still recovering from the recession, when sales evaporated, and GM and Chrysler were forced into bankruptcy.

"Even though we're improving, the industry still has a long way to go for a normal level of sales," Toprak said, which would be in the range of 14.5 to 16 million on a seasonally adjusted rate.

Shares of GM, Ford, Toyota and other publicly traded automakers closed higher.

GM: Sales of GM's (GM) core brands -- Chevrolet, Buick, GMC and Cadillac -- rose 23% last month versus January 2010, the company said.

The increase came in better than analysts had expected. Edmunds.com had forecast a sales increase of 11.1% for the month, while TrueCar.com was predicting a gain of 9.6%.

Michelle Krebs, a senior analysts at Edmunds.com, attributed the rise to incentives GM offered during January.

"GM's strong performance was buoyed largely by much heftier incentives than its competitors, particularly in certain regions of the country including the domestic-friendly heartland," he said.

Ford: Total sales at Ford (F, Fortune 500) rose 13% in January from the year before, including a planned 27% reduction in fleet sales to rental car companies.

The total was in-line with estimates from Edmunds.com and TrueCar.com.

Ford said consumer demand for family cars and trucks continued to increase in January. Retail sales were up 35% for cars, 22% for utilities and 24% for trucks last month.

Sales of of Ford's more fuel-efficient cars, the Fiesta and Focus, surged as consumers continue to feel the sting of pain at the pump.

"Higher gasoline prices are factoring into vehicle purchase decisions," said Ken Czubay, vice president of sales and marketing at Ford.

Chrysler: Sales at Chrysler rose 23% in January from year-earlier levels, driven largely by demand for the company's Jeep brand sport utility vehicles.

Total truck sales, including Jeep and Dodge nameplates, rose 38% in the month. But total car sales sank 22% at Chrysler.

"Jeep models are really carrying the manufacturer," said Toprak. "Despite relatively high gas prices, consumers are not shying away from SUVs and trucks."

Toyota: Toyota (TM) said total sales rose nearly 24% in January from the year before, when the Japanese automaker had suspended production of many vehicles due to recalls.

"Because of poor numbers last year, Toyota sales will look better than they are," said Toprak. But he added that the company could see real improvement in sales this year as the economy recovers and memories of last year's recall fiasco fade.

"We expect Toyota to slowly emerge this year from the black clouds created by the recalls," he said.

Other import brands: Honda (HMC) reported a 13% increase in January sales, while Nissan (NSANF) said sales were up nearly 15% compared with January 2010. To top of page

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