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Business / Auto Global

US Jan auto sales indicate strong start to 2013

(Agencies) Updated: 2013-02-04 15:39

DETROIT - US auto sales rose 14 percent in January, kicking off the industry's fourth straight year of recovery since the depths of recession as American consumers increasingly sought to replace their aging cars and trucks.

January was the third straight month that the annual US auto sales rate held above the 15 million mark, with a 15.3 million pace last month, according to industry research firm Autodata.

The results indicate the industry's gains will continue to outpace the broader US economic recovery in 2013. So-called "pent-up demand" for new vehicles, the improving US housing market and lower interest rates will boost new vehicle sales this year, industry executives and analysts said.

"We all started the year with a little bit of apprehension with the fiscal cliff debates and the new tax rates," said Toyota Motor Corp's Bill Fay, head of US sales for the Toyota brand. "Our industry again emerged as one of the strong points for the economy."

Overall sales were in line with Wall Street expectations, although individual companies' performances varied. Toyota, General Motors Co and Ford Motor Co shot past expectations, while other companies, including Honda Motor Co, fell far short.

While the current pace was below pre-recession US sales volume, it is much higher than the 10.4 million new vehicles sold in the United States in 2009. That year marked the lowest sales level since the early 1980s and pushed GM and Chrysler Group LLC into bankruptcy.

"It says to us that we continue to recover strongly from the recession despite the headwinds of higher taxes and lower government spending," Kurt McNeil, GM's head of US sales operations, said on a conference call on January's results.

The industry could grow as much as 7 percent in 2013, GM predicted. Ford forecast a gain of as much as 8 percent, triple the 2 to 2.5 percent growth it sees for the overall economy.

Pickup trucks shine

Pickup trucks in particular outpaced the broader market last month, helped by improvements in the US housing sector and purchases by small businesses, including bakeries, caterers and plumbers, GM executives said.

The average car on the road is more than 11 years old, according to automotive consulting firm Polk, after US consumers delayed new vehicle purchases during the recession and the early days of the economic recovery.

"Truck buyers delayed their purchases longer than any other segment," TrueCar.com analyst Jesse Toprak said. "The biggest driver of truck sales is the housing market. Business owners are now feeling more positive about the prospects of the economy."

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