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Auto Sales Indicate Strong Recovery

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Auto sales in the U.S. grew 14.2% to 1.04 million vehicles in January. This translates into a seasonally adjusted annual rate (SAAR) of 15.3 million units for the year, up about 1 million units from 2012.

Strong pent-up demand continues to be the key driving factor for sales growth. Average age of vehicles on U.S. roads increased to 11.3 years from 10.8 years in 2012. The industry should also be thankful to friendlier banks as they offered greater access to loans on easier terms and with lower interest rates. Further, improving job market boosted the consumer sentiment to purchase new cars.

Most of the major automakers posted double-digit rise in sales. Toyota Motor Corp. (TM - Free Report) topped all the automakers in terms of sales growth. Let us look at the individual automakers’ sales.

U.S. Automakers

General Motors Company (GM - Free Report) posted a healthy 15.9% rise in sales to 194,699 vehicles in January, driven by strong Chevrolet Silverado and GMC Sierra pickup truck sales. Sales of Chevrolet Silverado soared 32% to 35,445 units while that of GMC Sierra sales leapt 35% to 12,846 units.

Ford Motor Co.'s (F - Free Report) sales spiked 21.7% to 165,863 vehicles, driven by impressive sales of all new Fusion sedan, Explorer sports utility vehicle (SUV) and Escape compact crossover. Fusion had its best January in its history with sales growing 65% to 22,399 vehicles. Explorer had its best January since 2005 with sales of 14,554 units, up 46% year-over-year. Escape established a January record as well with sales of 19,939 units during the month.

Chrysler Group – controlled by Italy’s Fiat SpA – had the best January in five years. The automaker saw a 16.4% rise in sales to 117,731units, driven by strong sales of its Dodge lineups. Sales of Dodge Avenger sales soared 69% while that of Dodge Journey crossover SUV almost doubled.

Japanese Automakers

Toyota Motor reported an impressive 26.6% jump in sales to 157,725 vehicles driven by strong sales of Camry and Corolla cars. Sales of Camry mid-size car rose 12.7% to 31,897 units while that of Corolla subcompact increased 12.7% to 23,822 units.

Honda Motor Co. (HMC - Free Report) recorded a 12.8% rise in sales to 93,626 vehicles led by outstanding sales of its redesigned Accord. Sales of Accord sprang up 75% to 23,924 units. However, sales of Civic slid 4% to 21,881 units.

Nissan Motor Co. (NSANY - Free Report) posted a meager 2.0% rise in sales to 80,919 vehicles as sales of some its popular models declined during the month. These popular models include Altima car, which witnessed a 4% fall in sales to 21,464 units, and Rogue truck, which recorded a 9.6% decline in sales to 8,951 units.

Other Automakers

Daimler AG’s (DDAIF - Free Report) Mercedes-Benz reported an 11.1% rise in sales to 23,579 vehicles driven by its impressive C-Class sedan sales. Sales at Bayerische Motoren Werke AG (“BMW”) inched up 0.75 to 16,513 units, led by a 56% gain in its X5 SUV sales.

Volkswagen AG (VLKAY - Free Report) posted a 6.6% rise in sales to 29,018 vehicles. It was the company’s best January in the U.S. since 1974. The mediocre rise in sales was attributable to poor sales of its popular Jetta sedan, which recorded a 4% drop to 10,522 units. However, sales of another popular model Passat rose 40% to 8,856 units.

Hyundai Motor Co.’s sales edged up 2.4% to 43,713 vehicles. The marginal rise was attributable to a 24% rise in Elantra small car sales, partially offset by an 8% decline in Sonata midsize sedan sales.


Strong pent-up demand, easier car finance and improving macroeconomic conditions will continue to act as a catalyst to rejuvenate U.S. auto sales to the pre-recession level. Good news is that improving auto sales will also help the overall economic recovery in the U.S. being a key industry for growth. Full year sales are expected to exceed 15 million units compared with 14.5 million units in 2012.

GM expects a 7% rise in industry sales in 2013. Meanwhile, Ford predicted an 8% gain in the year, which reflects more than threefold rise compared with the overall economic growth of 2%–2.5% forecasted by the automaker.

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