America's three big automakers reported strong December sales that surpassed
analysts' expectations and helped deliver the industry's best year since 2008.
U.S. automakers sold vehicles at a seasonally adjusted annual rate of
13.56 million vehicles in December, up 8.9 percent from December 2010. Sales
in both November and December were the highest since June 2008, just before
the global economy sank deep into the Great Recession.
An industry that has suffered mass layoffs and government bailouts in
recent years appears to be creeping back.
"It's been a phenomenal turnaround for the Big Three," said Michelle
Krebs, an analyst with researcher Edmunds.com. "Chrysler and GM have the
American taxpayer to thank for that, but in the end, it's been a good
investment."
U.S. sales were strong enough in 2011 to restore General Motors to its
perch as the world's largest auto seller. GM displaced Toyota, which had
usurped that top spot for the first time in 2008. GM vehicle sales rose in
December by 4.5 percent to 234,351 units. Full-year sales soared 13 percent.
Chrysler, which also received a bailout from the U.S. government, saw
December sales jump 37 percent to 138,019 vehicles. Analysts expected closer
to 33 percent. Full-year sales at Chrysler grew by a healthy 26 percent.
Ford, which did not rely on government assistance, also beat
expectations. Sales rose 10 percent to 209,447 cars and trucks in December and
grew 11 percent for the full year.
Minnesota dealers were thrill- ed with the brisk business after a brutal
recession that sent dozens of dealerships to the junkyard.
"The end of the year was good for our dealers," said Scott Lambert,
spokesman for the Minnesota Auto Dealers Association. "I would expect that we
will be up 20 percent this year over last year."
Asked what prompted the strong demand, Lambert gave some of the credit to
Lexus, which started running TV ads a few years ago that "made it cool" to
give someone a car for Christmas.
Paul Rubin isn't sure who to thank, but he sure isn't complaining. Car
and truck sales at his White Bear Lake GM dealership shot up 15 percent for
the year and ended with a bang.
"It's exciting," Rubin said. "Usually 10 days before Christmas it shuts
down to noth- ing because of Santa. But we continued strong right up to
Christmas Day. That was very unusual."
GMC Yukons, Suburbans, Acadias and the crossover Buick Enclaves proved
hot sellers, thanks to improved consumer confidence, plentiful and inexpensive
bank financing and incentives from GM that included 0 percent financing or
large rebates, Rubin said.
"The incentives helped clear out the '11s so we are up to selling fresh
2012 merchandise," Rubin said.
Pent-up demand
Also driving demand was the aging fleet of cars on U.S. highways. They
average 11 years, up from the typical eight. "So some of this is just plain
necessity from pent-up demand," Rubin said.
Tom Leonard, co-owner of Fury Motors in South St. Paul, agreed. He
watched sales spike 45 percent in 2011 as customers traded in 250,000-mile
clunkers for sleek redesigned Jeep Grand Cherokees and Chrysler 200s.
"The Chrysler story, to me, is beyond remarkable," Leonard said. "The
company that was given up for dead two years ago is practically leading the
industry."
Redesigns, bolder marketing and competitive incentives helped turn things
around. Fury sold 65 Cherokees in December alone, compared with 27 for all of
2009.
"In the dark days of 2009, we were not selling 65 new vehicles in a month
even [after combining] Chrysler, Dodge and Jeep," Leonard said. Dodge Ram
pickup sales also jumped, climbing 40 percent last year.
Comeback kids
"It's certainly not a bad time to be selling cars," agreed Doug
Sprinthall, who heads new-car operations for Walser Automotive. He said the
real comeback kids of the industry may be Toyota and Honda, which Walser
Automotive sells.
"I don't think that people realized how much of an effect that tsunami
had on Japanese automakers," Sprinthall said. "After the summer, we didn't
have any cars to sell. Toyota and Honda are just getting back in the game. ...
Those sales were up quite dramatically in December."
The expectation is that 2012 will be even better as inventories return to
normal. But Kalan and Derek Krueger weren't thinking about inventories or
tsunamis when they stopped by Walser Automotive on Wednesday.
The couple from Rochester were more concerned with gas mileage as they
took a 2012 Toyota Corolla out for a test drive. They plan on buying a car
this month.
