DETROIT U.S. 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 U.S. 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 U.S. economic recovery in 2013. So-called "pent-up demand" for new vehicles, the improving U.S. 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 (7203.T) Bill Fay, head of U.S. 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 (GM.N) and Ford Motor Co (F.N) shot past expectations, while other companies, including Honda Motor Co (7267.T), fell far short.
While the current pace was below pre-recession U.S. 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 U.S. 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 U.S. 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 U.S. 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."
GM said purchases of its Chevrolet Silverado and GMC Sierra full-size pickup trucks jumped by about one-third for each model. Ford's F-Series truck sales were up 22 percent, while Chrysler's Ram pickup trucks were up 14 percent. Pickup trucks generate some of the strongest profits for automakers.
GM, the largest U.S. automaker by sales, said incentives on its current trucks were higher compared with a year ago. GM will launch its redesigned lineup of trucks in the second quarter.
OUTPACING THE INDUSTRY
U.S. auto sales in 2012 rose more than 13 percent to 14.5 million cars and trucks, and GM has forecast an increase to between 15 million and 15.5 million for 2013.
U.S. auto sales are among the early indicators of economic health each month. U.S. employment grew modestly in January and gains in the prior two months were bigger than initially reported, despite the unexpected contraction in economic output during the last three months of 2012.
GM posted a 16 percent year-on-year increase, while its smaller rival Ford logged a 22 percent jump. Japan's Toyota was up nearly 27 percent. The three automakers, which account for nearly half the U.S. market, beat Wall Street forecasts.
But others, including Chrysler, fell short of estimates. The No. 3 U.S. automaker, majority owned by Italy's Fiat SpA FIA.MI, posted a 16 percent gain. Nissan Motor Co's sales (7201.T) increased by 2 percent, and Honda's 12.8 percent rise came in below the more than 20-percent gain projected by analysts.
Sales of cars and crossovers, such as the recently launched Ford Fusion mid-size sedan and the Chevy Equinox mid-size crossover, also helped boost the industry last month.
But sales for Ford's Lincoln luxury brand fell 18 percent, hurt by inventory shortages of its newly launched MKZ sedan.
Ford said it was holding back those sedans to complete more rigorous quality checks. MKZ inventory should be at planned levels by April, Ford U.S. sales executive Ken Czubay said, adding that the checks were "paramount" to relaunching the brand.