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Auto sales gain traction for 2012

Strength last year appears to carry over into Jan.

Analysts expect the auto industry to sell as many as 14 million vehicles in 2012, a 9 percent increase from 2011.
Analysts expect the auto industry to sell as many as 14 million vehicles in 2012, a 9 percent increase from 2011. Paul Sancya/Associated Press

DETROIT - Chrysler Group and Ford Motor Co. reported yesterday that sales increased in January, as the auto industry’s momentum from 2011 extended into the new year.

General Motors, however, reported a 6 percent decrease from the period a year earlier, when its sales were inflated by big discounts that the company offered after its public stock sale. Sales of GM’s plug-in hybrid, the Chevrolet Volt, also fell from December after a government investigation into the potential for its battery to catch fire after a crash received widespread publicity.

Hours after reporting its first annual profit since 2005, Chrysler posted a 44 percent gain last month. Its passenger car sales more than doubled.

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Ford sales rose 7 percent. It was the best January for both companies since 2008.

“The strength that the economy and the auto industry showed in the fourth quarter carried into January, so we believe the year is off to a good start,’’ said Don Johnson, GM’s vice president of US sales operations, in a statement.

Toyota Motor Corp. and Nissan Motor Co. also reported gains from a year earlier, and Honda, Japan’s third-largest automaker, snapped an eight-month streak of sales declines.

Volkswagen reported a 48 percent gain, marking its best January since 1974. Nissan said sales rose 10 percent.

Analysts estimated that auto sales last month overall would be about 6 percent higher than in January 2011. For all of 2012, analysts expected the industry to sell as many as 14 million vehicles, which would represent a 9 percent increase from the 12.8 million sold in 2011. January is typically the slowest month of the year for car dealerships.

“For the first time in several years, we are starting the year off with a warm and fuzzy feeling of the good old days, where the industry and the consumers are once again focused on the excitement of the new cars and not which car company is going to survive,’’ said Jesse Toprak, vice president of industry trends and insights for the automotive research website TrueCar.com.

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Jessica Caldwell, senior analyst with the website Edmunds.com, said sales would be boosted for a few more months by shoppers who had put off trying to buy a new car or truck last year, when scarce supplies caused prices of some popular models to rise.

“This is a solid start to 2012, especially when there were so many fewer ‘buy’ messages in January compared to December’s heavy holiday sales push,’’ Caldwell said.

Rising auto sales in general are a positive contributor to the economy, but the gains for pickup trucks in particular may indicate long-awaited improvement in the housing market.

Sales of full-size pickups rose 47 percent at Chrysler and 8 percent at Ford.


Material from Bloomberg News was used in this report.