What January auto sales say about industry comeback

Auto sales in January were up from last January but down from December. The figures suggest the auto industry is on track for a second straight profitable year.

Automotive sales for January did not reach December’s peak, but experts say 2011 is on track to be the industry’s second consecutive profitable year since 2005.

January sales of new cars and light trucks in the US are expected to reach 794,500 units, according to J.D. Power and Associates, a total that is 14 percent higher than January 2010 but 16 percent lower than December 2010.

The slowdown in January sales compared with December suggests consumers may be holding back from purchasing big-ticket items following the holiday season. Most analysts say a full rebound in the automotive industry won’t happen until unemployment drops and the housing market experiences a full recovery.

January sales are typically slow compared with December, says Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. With the decrease in dealership and automaker incentives following the holidays, he adds, January sales reflect a natural demand “of consumers who had to buy a car as opposed to those who want to buy a car.”

J.D. Power and Associates said it was forecasting the sale of 13 million light vehicles in 2011, 12 percent more than the 11.6 million units sold in 2010.

“There’s a stronger feeling that the economy is going to cooperate with this recovery,” Schuster says. Key drivers such as consumer confidence, better lease terms, improved credit, and general economic conditions will help sales improve as the year goes on, he adds.

Ford Motor Co. and General Motors reported the highest unit sales of all automakers, domestic and foreign, for the month. GM’s US sales of 178,897 vehicles represented a 22 percent increase over January 2010. The company credits a growing demand for trucks and crossovers as well as successful new models such as the Buick Regal and Chevrolet Cruze.

Ford sales in January, at 126,891 units, were 9 percent higher than the same month last year. Ford attributed the majority of the increase to its popular F-Series line of pickup trucks, which was responsible for the sales of 35,806 units. Ford also announced that the Ford Escape, a sport-utility vehicle, set a January sales record with total sales 30 percent higher than year before.

Ford also said it also had more vehicles with higher fuel economy than its competition, helping to position it more favorably with consumers in the recession and subsequent recovery. For examples, Fusion sales increased 18 percent in January compared with the same month last year, a sales record for the model.

“Higher gasoline prices are factoring into vehicle purchase decisions,” said Ken Czubay, a Ford vice president, in a statement released Tuesday.

Toyota led foreign sales in the US. The company posted a 17 percent increase in January from a year ago, or 115,856 units sold.

The slowdown in January sales compared with December suggests consumers may be holding back from purchasing big-ticket items following the holiday season. Most analysts say a full rebound in the automotive industry won’t happen until unemployment drops and the housing market experiences a full recovery.

January sales are typically slow compared with December, says Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. With the decrease in dealership and automaker incentives following the holidays, he adds, January sales reflect a natural demand “of consumers who had to buy a car as opposed to those who want to buy a car.”

J.D. Power and Associates said it was forecasting the sale of 13 million light vehicles in 2011, 12 percent more than the 11.6 million units sold in 2010.

“There’s a stronger feeling that the economy is going to cooperate with this recovery,” Schuster says. Key drivers such as consumer confidence, better lease terms, improved credit, and general economic conditions, he adds, will help sales improve as the year goes on.