Strong January Car Sales Set Stage For Better Year

DETROIT (WWJ) - The new year is off to a good start for the auto industry, with January sales numbers up an average of seven per cent.

"I think this is a good start to the year, and there will be growth throughout the rest of the year," said Jessica Caldwell, a senior analyst with Edmunds.com. "It's definitely going to ebb and flow."

Chrysler lead the way among the domestic brands.

"We started the new year with a bang by growing sales 44 percent," said Reid Bigland, President and CEO – Dodge Brand and Head of U.S. Sales for Chrysler. "In January we continued building on the sales momentum that we generated during 2011 with our 16 all-new or significantly-refreshed products."

January was Chrysler's 22nd consecutive month of year over year sales increases, fueled by new products.
Ford, meanwhile, posted a 7 per cent sales increase.

"January started off with solid sales versus year-ago levels," said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. "Ford saw the same solid month, with smaller vehicles in higher demand. Escape continued its record-setting run, and Focus set the pace for car sales in California, Texas and the Southeast."

General Motors was the only major carmaker to report its sales down in January, off six percent from 2011. Sales operations manager Don Johnson says they had a strong month in 2011 to compare to.

January of 2011 was fueled by a big promotion that General Motors ran, attempting to bring former customers back to its brands. Because of that, they put big incentives on a number of vehicles.
So, Edmunds analyst Jessica Caldwell says, lower sales numbers this year could end up being more profitable for GM.

"Good quality, less money on incentives, which is going to help their bottom line at the end of the day."

Most automakers posted very strong sales figures. Volkswagen, with new products, saw its sales up 48 per cent. Nissan sales were up around 10 per cent.

Toyota appears to be recovering from product shortages that hurt the brand through the second half of 2011. It's sales were up 7.5 per cent in January.

"This month's results show that the all-new Camry is a hit, attracting both new and loyal customers with its class-leading performance and value," said Toyota division general manager Bob Carter. "Our focus on delivering the best new products will continue as we enter the most aggressive launch of new vehicles in Toyota's history."

Analysts, who watched a roller coaster ride in 2011, say it's good to get 2012 off to a solid start.

"Having a strong January, getting that under the belt is great news," says Jeff Schuster, who directs the global forecasting team at LMC Automotive.

Schuster says the overall economic picture remains guarded, but that's an improvement from before.

"I think certainly stronger than if we would have been having this discussion in late summer or early fall," he said. "Things have improved. The overall economy is expected to be positive."
GM's Johnson sees the trend toward better sales overall continuing. He says new products will help GM in the coming months.

"Y'know we're just out with the new Malibu Eco," he said. "We're gonna have the new Cadillac ATS and XTS over the spring and the summer. So, we have some good product cadence."

GM only sold 603 Chevy Volts in January. Johnson says it was obviously affected by the publicity given to fires after crash test, even though federal investigators ended up giving the Volt a clean bill of health.

"We've taken a step back," he said. "It is what it is now. We need to get into a bit of a re-launch, rebuild some confidence in the product."

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