Detroit, Toyota see big US sales gains in January

Detroit automakers and Toyota see big US sales gains in stronger-than-usual January

Associated Press
Detroit, Toyota see big US sales gains in January
.

View photo

In this Wednesday, Jan. 9, 2013 photo, Chevy trucks line the lot of a dealer in Murrysville, Pa. Ford, Chrysler and General Motors all reported double-digit gains for January as last year’s momentum in U.S. auto sales continued into 2013, according to reports Friday, Feb. 1, 2013. (AP Photo/Gene J. Puskar)

DETROIT (AP) -- American consumers ignored tax increases and trudged through winter weather to buy new cars and trucks at an unusually strong pace last month. It was the auto industry's best January since 2008.

"It was like a sprinter out of the starting blocks," said Mike Jackson, CEO of AutoNation Inc., the country's largest auto dealership chain.

U.S. auto sales rose 14 percent to more than 1 million. Toyota's 27 percent gain was the biggest among the major car companies. Ford's sales jumped 22 percent, while GM and Chrysler each reported 16 percent gains compared with a year earlier.

The results left the industry optimistic about the new year. Businesses bought more trucks. Consumers are ready to buy — their cars have reached a record average of 11.3 years old — 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, and new-car purchases tend to rise or fall with the market. 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.

Sales ran at an annual pace of 15.3 million in January. If that holds for the rest of the year, automakers will sell nearly 1 million more vehicles than in 2012, when sales rose 13 percent.

Analysts predict full-year sales of 15 million to 15.5 million this year. Although still far from the 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 three decades.

The strong January numbers came even though higher taxes reduced take-home pay for most Americans. Taxes rose after a 2-percent reduction in Social Security taxes that was in place for two years expired Jan. 1.

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.

Toyota sales jumped on the strength of the Prius hybrid cars and wagon, which rose 36 percent, and the new Avalon sedan, which was up 50 percent. The luxury Lexus brand climbed 32 percent on strong sales of the new ES and GS sedans.

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.

Ford's luxury Lincoln brand fell 18 percent. Lincoln's new MKZ sedan, which is featured in a Super Bowl ad, is going on sale now, but could be tough for buyers to find. Ford's U.S. sales chief Ken Czubay said the new Lincolns are undergoing extra quality checks that will delay shipments through April.

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 pickups 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.

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:

— Honda's sales rose 12.8 percent. A 75-percent increase in sales of the new Accord helped offset weaker sales of the CR-V and Civic.

— 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.

View Comments (21)

Recommended for You

  • US billionaire says WWII Japanese ship found in Philippines

    Microsoft co-founder Paul Allen said Wednesday he had found one of Japan's biggest and most famous battleships on a Philippine seabed, some 70 years after American forces sank it during World War II. Excited historians likened the discovery, if verified, to finding the Titanic, as they hailed the…

    AFP
  • Central Florida man killed by police serving search warrant

    By Barbara Liston ORLANDO, Fla. (Reuters) - A 26-year-old Central Florida man died after being shot in the face early on Wednesday morning by a sheriff’s deputy attempting to serve a search warrant in a narcotics investigation, authorities said. The Volusia County Sheriff’s Office reported in a…

    Reuters
  • 175-Pound Pit Bull Hulk Shatters Misconceptions About the Breed

    This dog just may be the world's largest Pit Bull. Only 18-months-old, Hulk weighs a hefty 175 pounds. He's also best friends with a 3-year-old boy.

    ABC News
  • Chad president tells Boko Haram leader to surrender or face death

    By Madjiasra Nako N'DJAMENA (Reuters) - President Idriss Deby of Chad said on Wednesday he knew the whereabouts of Abubakar Shekau, the leader of the Nigerian militant group Boko Haram, and called on him to surrender or risk being killed. Chad's army has waged a series of battles against Boko Haram…

    Reuters
  • Passengers use emergency slides after landing in Denver

    DENVER (AP) — Passengers on an American Airlines flight from Charlotte, North Carolina, were forced to slide off the plane on emergency chutes soon after landing in Denver on Wednesday.

    Associated Press58 mins ago
  • Australians on Indonesia death row arrive on execution island

    Two Australian drug smugglers were taken Wednesday to an Indonesian island where they will be executed despite frantic diplomatic efforts to save them, as Prime Minister Tony Abbott said Australia was "revolted" by their looming deaths. Andrew Chan and Myuran Sukumaran, the ringleaders of the…

    AFP
  • France, Cameroon wouldn't take foreigner later shot by LAPD

    LOS ANGELES (AP) — A homeless foreigner shot to death by Los Angeles police was in the country illegally after serving time for a bank robbery but couldn't be deported because no country would take him, U.S. immigration authorities said Wednesday.

    Associated Press
  • U.S. may review 1959 airplane crash that killed Buddy Holly

    (Reuters) - U.S. transportation safety investigators said on Wednesday they are reviewing a request to reopen a probe into the 1959 airplane crash that killed musicians Buddy Holly, Ritchie Valens, J.P. Richardson, better known as "The Big Bopper," and their pilot. The original investigation 56…

    Reuters
  • View

    Turkish jetliner skids off on runway (9 photos)

    A Turkish Airlines jet landing in dense fog in the Nepalese capital Wednesday skidded off a slippery runway but there were no serious injuries, officials said. Officials at Kathmandu's Tribhuwan International Airport said the plane with 238 people on board was coming from Istanbul when the…

    Yahoo News
  • Iranian president says Israel 'greatest danger'

    Iranian President Hassan Rouhani on Wednesday said Israel creates the "greatest danger" in the region, after Israeli Prime Minister Benjamin Netanyahu warned against a nuclear deal with the Islamic republic. In a speech on Capitol Hill, Netanyahu said Tuesday the nuclear agreement US President…

    AFP
  • Former marine reported killed in Syria

    A former Royal Marine has become the first Briton to be killed while fighting with Kurdish forces battling Islamic State jihadists in Syria, leaving his family "devastated" Wednesday. Konstandinos Erik Scurfield, 25, died on Monday in a battle with IS militants, a source in the Kurdish People's…

    AFP
  • Killers sought in deaths of 300,000 chickens in South Carolina

    By Harriet McLeod CHARLESTON, S.C. (Reuters) - Revenge may be the motive for the killings in South Carolina of more than 300,000 commercial chickens worth about $1.7 million over the past two weeks, authorities said on Monday. Birds have been found dead of unnatural causes in 16 chicken houses at…

    Reuters
  • Americans Love K-Cups, but Their Creator Regrets Inventing Them

    Now it seems that John Sylvan, the inventor of the tiny containers, is firmly on Team #KillTheKCup too. “No matter what they say about recycling, those things will never be recyclable,” said Sylvan.

    Takepart.com
  • 'Thousands' of Russian troops in east Ukraine: US envoy

    The United States' senior envoy to Europe alleged Wednesday that Russia had deployed "thousands and thousands" of troops to neighboring Ukraine. Speaking to a congressional foreign affairs committee, Assistant Secretary of State Victoria Nuland also told US lawmakers that Russia was flooding…

    AFP51 mins ago
  • View

    Hello kitty and kitty and lots more kitties on Japanese island where cats rule (17 photos)

    An army of feral cats rules a remote island in southern Japan, curling up in abandoned houses or strutting about in a fishing village that is overrun with felines outnumbering humans six to one. Originally introduced to the mile-long island of Aoshima to deal with mice that plagued fishermen's…

    Yahoo News
  • Survivor testifies about 2 friends stabbed, bound, drowned

    PHILADELPHIA (AP) — A man who survived being beaten, bound, stabbed in the neck and kicked into the Schuylkill River took the stand in a hearing Tuesday and described the night his two friends lost their lives.

    Associated Press
  • Georgia police officer killed in shootout

    By David Beasley ATLANTA (Reuters) - A Georgia police officer was killed in a shootout with a suspect in suburban Atlanta early on Wednesday, authorities said. Officers went to investigate reports of shots in a suburban neighborhood and came under fire about 1:30 a.m. EST, according to the Fulton…

    Reuters
  • Senate fails to override Obama's veto of Keystone XL approval

    By Susan Cornwell WASHINGTON (Reuters) - The U.S. Senate failed on Wednesday to override President Barack Obama's veto of legislation approving the Keystone XL oil pipeline, leaving the controversial project to await an administration decision on whether to permit or deny it. The Senate mustered…

    Reuters