Car sales on way to best year since 2007

Posted on January 2, 2013

The U.S. auto industry should close out a robust 2012 in which Americans bought about 14% more new vehicles than in 2011, the third consecutive year sales rose by more than 10%.

Industry forecasters now expect total sales for 2012 to top 14.5 million cars and trucks when automakers report December sales on Thursday. That would cap the best year since 2007, when sales totaled 16.1 million.

More significantly, the annual selling rate increased steadily throughout the year, and the December pace came in at about 15.4 million, according to most forecasts.

“We are ending the year on a very high note, higher than I think anyone anticipated,” said Michele Krebs, senior analyst at

Luxury-vehicle sales are expected to account for 16% of all retail vehicles sales in December, up from 14.8% for the same month last year, according to J.D. Power and Associates.

“Luxury sales always do well this time of the year, but December is turning out to be a great month,” John Humphrey, senior vice president of global automotive operations at J.D. Power said in a report.

Also, December sales probably increased partially because of purchases in the New York and New Jersey area that were postponed because of superstorm Sandy.

Next year, industry sales are expected to exceed 15 million — even if President Barack Obama and Congress fail to reach a deal on the federal budget, triggering tax increases and steep spending cuts.

For most of 2012, the industry’s recovery outpaced the broader economy. Now, with unemployment declining and the U.S. housing industry finally recovering, most analysts and executives are optimistic.

Tim Jackson, president of the Colorado Automobile Dealers Association, said new car sales in his state have risen, but are still about 25% below the high reached in 2000.

“To have a nine-year downward trend and to regain half of that loss in the first three years afterward is certainly a much faster rebound than anybody can remember,” Jackson said.

Toyota and Honda have shown the biggest improvement, largely because their production bounced back following the disruptions caused by the March 2011 earthquake and tsunami in northeastern Japan. Through November, Toyota’s market share has increased to 14.4% from 12.7%, and Honda’s market share has recovered to 9.8% from 9.0%.

“The Japanese were the big winners in 2012 because they were making such a big comeback,” Krebs said. “Chrysler also was a big winner.”

Chrysler likely will finish 2012 as the only domestic automaker to gain market share for the year.

The Auburn Hills automaker kept up its momentum, partially because its namesake Chrysler brand sales surged 43% from a year earlier in the first 11 months of 2012. That increase reflected the strength of the 300 and 200 large and midsize sedans. The housing market’s modest recovery helped boost pickup sales for most automakers.

That trend likely will continue in the coming year. By mid-2013, a new Chevrolet Silverado and a GMC Sierra will reach dealerships.

“We are calling next year the year of the truck,” Krebs said.

Brent Snavely, Detroit Free Press.