Automakers rack up solid gains to finish 2010

Fueled by holiday and year-end discounts, as well as the introduction of new models, automakers finished 2010 on a high note by posting the year's best monthly sales in December.

U.S. light vehicle demand climbed 11 percent last month to 1.1 million units--the best month of the year on a unit basis. Still, it was one of the weaker percentage increases of the year because of a tough comparison to December 2009, one of that year's strongest months.

Most every automaker gained sales in December, a month highlighted by a 37 percent surge for Hyundai-Kia and a 28 percent advance at Nissan North America. Toyota Motor Corp. was the only company to record a decline, down 6 percent.

Overall, U.S. light vehicle sales rose 11 percent to 11.59 million units last year from 10.43 million in 2009--when demand fell to the lowest point in 27 years. It was the industry's first annual U.S. sales gain since 2005.

Industry sales last year remained almost a third fewer than the 16.8 million annual average from 2000 to 2007, according to Autodata Corp.

Auto makers and analysts predict more growth in 2011 as the U.S. economy slowly recovers.

Ford Motor Co. anticipates U.S. sales of 12.5 million this year. GM is expecting U.S. industry sales to rise more than 10 percent from 2010.

"The U.S. economy will be stronger and grow more in 2011," said Don Johnson, GM's vice president of U.S. sales operations. "The jobs story remains mixed. The weakest link continues to be the housing market."

Strong December

GM, helped by new models and healthy demand for crossovers, recorded an 8 percent increase in December sales. Ford said demand rose 4 percent last month, while Chrysler Group had a 16 percent jump. American Honda, which includes Acura, posted a 21 percent gain in December sales, and said 2010 sales rose 7 percent.

At the Hyundai Group, which includes Kia, sales jumped 37 percent last month, and finished 22 percent higher for the year at a record 894,496 units.

But Toyota Motor Corp., still feeling the unfavorable impact of major recalls last year, said December U.S. sales fell 6 percent. Toyota's overall 2010 sales were flat at 1.76 million units.

"December was a really strong month and we're starting to see the market recover and people coming back to car shopping," said Jesse Toprak, the top analyst at TrueCar.com, an online shopping site."There is still much pent-up demand but until we start to see a recovery in the housing market and job creation, the growth rate annually will be around 10 percent."

Ford had posted double-digit sales increases each month last year except for a 3 percent rise in July and a 14 percent decline in August.

While sales at the Ford division climbed 10 percent last month, Ford's results were hampered by a 23 percent drop in Lincoln sales, and an 11 percent fall in Mercury demand amid that brand's phase-out.

Ford said its December results also reflect a 40 percent reduction in deliveries to daily rental customers.

For the year, Ford's U.S. sales rose 17 percent to 1.935 million units--helping the automaker gain market share for the second consecutive year. It's the first back-to-back increase in Ford's U.S. market share since 1993. Ford estimated its U.S. market share in 2010 at 16.4 percent, up 1.1 points from 2009 and 2.2 points from 2008.

Chrysler posted its ninth consecutive monthly sales gain. Jeep Grand Cherokee demand more than tripled, and Ram pickup sales jumped 93 percent compared with December 2009.

Chrysler said its sales rose 17 percent last year to 1.1 million units. All of the company's brands--Chrysler, Jeep, Dodge and Ram Truck--generated sales increases in 2010 compared with 2009.

The automaker launched 16 all-new or significantly-improved models in 2010, most of them during the final quarter.

“We are extremely proud of the sales strides we made during this transition year,” Fred Diaz, head of the Ram truck brand and Chrysler's top sales executive, said in a statement.

Behind GM's results

At GM, December marked the fourth consecutive monthly sales gain after its August sales dropped 25 percent, reflecting an unfavorable comparison to August 2009--when the government's cash-for-clunkers program fueled demand.

The automaker's U.S. sales advanced 7 percent for all of 2010--its first annual increase since 1999.

Demand was up last month for all four of GM's surviving U.S. brands, with sales advancing 40 percent at Buick, 13 percent at Cadillac, 9 percent at Chevrolet and 35 percent at GMC.

For all of 2011, sales for GM's four brands increased 21 percent to 2.2 million units, while retail sales rose 16 percent during the year.

GM's four brands sold 118,435 more vehicles this year than the company generated with eight brands in 2009.

But the automaker's overall sales performance continues to be dragged down by the shutdown of Pontiac, Saturn and Hummer. GM's results also no longer include Saab, which has been sold.

GM said Tuesday its December sales also reflected a planned reduction in fleet sales to rental operators. Fleet sales represented 17 percent of GM's overall sales last month.

GM said it sold 567,458 crossovers in the United States last year--more than any other automaker.

Ford reclaimed from Toyota the No. 2 spot for U.S. sales that it held for 76 years until 2007. The U.S. automaker outsold Toyota by 200,464 units last year.

Toyota's December sales drop marked the third-straight month the company's U.S. deliveries declined. The company was the only large automaker to sell fewer vehicles in the United States last year than in 2009.

“The biggest worry for Toyota is they're not taking advantage of the recovery in the market,” said Toprak, the analyst with TrueCar. “They're falling behind again in a month where all their competitors are up from last year. It just can't be good for momentum, sales or morale.”

December had 27 selling days, one fewer than a year earlier.

By David Phillips- Automotive News