U.S. Car Manufacturers Have Record December; Honda Sales Fall

PHOTO: Chrysler 200 sedan
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Chrysler announced its best monthly retail sales in four year years, leading the pack of U.S. car makers who had capped a robust 2011 with strong December sales. Consumers unleashed pent-up demand although sales of an estimated 12.8 million vehicles for the year were still far short of their peak of 16.1 million reached before the recession began in 2007.

Chrysler Group reported 138,019 U.S. car sales in December, a 37 percent increase compared with December 2010 and its best monthly sales since May 2008. The company reported strong sales of the Chrysler brand sedans and Jeep sales.

Chrysler sold 1.37 million units in 2011, an increase of 26 percent from 2010, the largest percentage sales gain of any full-line manufacturer, the company said in a release.

Sales of Chrysler-branded cars increased 83 percent from a year ago, the largest percentage sales gain of all the Chrysler Group brands, and represented its best monthly sales since August 2008. The Fiat brand surged 44 percent compared to November. Compared to a year ago, Jeep sales increased 41 percent and Dodge sales increased 28 percent.

"December sales are so far proving that 2012 will be another strong year for the industry, Alec Gutierrez, senior market analyst at Kelley Blue Book, said. "Healthy automobile sales are a positive signs in terms of consumer spending which is quite important for the economy as a whole."

Consumer spending makes up for 70 percent of U.S. GDP and vehicle sales are one of the largest household expenses.

A little more than 11.5 million vehicles were sold through November and with the over 1.2 million sales likely come for December after all manufacturers announce their numbers, Gutierrez estimates about 12.8 million vehicle sales in 2011.

Interest rates remain at historic lows which add fuel to the fire for consumers shopping for cars, said Paul Taylor, the National Automobiles Dealers Association's chief economist.

"Cash incentives and low interest rates are likely to be a part of manufacturers' efforts to regain market share," he said.

Gutierrez projects industry sales to be slightly greater than 1.2 million units overall this month, which equates to a 13.4 million unit annualized sale pace.

General Motors reported the highest unit sales in December of the car makers with 234,351 units, up 5 percent compared to last year. Sales for the calendar year increased 14 percent for the year to more than 2.5 million units.

GM's Chevrolet Volt sold more than 1,500 units in December, its best month ever. Sales of the Chevrolet Cruze increased 54 percent and sales for the Chevrolet Sonic increased 42 percent year-over-year. The Chevrolet brand had the most sales at 161,158 units in December, an increase of 8.9 percent from the previous year. There were 1.8 million Chevrolet cars sold for the year, an increase of 13.4 percent from 2010.

Ford Motor Co. sold 2,148,806 vehicles in 2011, up 11 percent for the year. The company had its best December for retail sales since 2005 with 210,140 cars sold in the month, up 10 percent from the previous year.

Ford's small cars, utilities and truck sales boosted sales. Small car sales increased 25 percent in 2011 with 244,291 cars sold. The company said it expects the U.S. economy to expand 2 to 3 percent this year and industry sales of13.5 million to 14.5 million.

Gutierrez said small cars have been strong sellers because of higher gas prices this year. The monthly national average in May for a gallon of regular gas was $3.91, according to the U.S. Energy Information Administration. The national weekly average is $3.30.

Car inventories were tighter toward the end of the year especially for Japanese manufacturers after a supply disruption from the earthquake and tsunami that rocked Japan in March, and massive flooding in Thailand.

Toyota Motor Corp. reported total car sales rose 4.4 percent this year from 2010 and U.S. auto sales increased 0.4 percent in December with 178,131 vehicles sold.

Gutierrez projected sales of Japanese manufacturer Toyota would increase 6 to 7 percent for the year while he expected Honda to increase 3 to 5 percent.

Honda Motor Co. reported sales fell 19 percent in December compared to a year ago with 105,230 vehicles sold. December's sales were 25 percent higher than those in November. Sales of Honda's cars decreased 29 percent and truck sales fell 5.2 percent. Honda sold 1.15 million cars in 2011, down almost 7 percent on an unadjusted basis.

Gutierrez projected sales of Hyundai to increase around 20 percent for the year. The Korean manufacturer reported sales rose 13 percent in December, breaking its sales record for the month, selling 50,765 vehicles. One of Hyundai's most popular vehicles, the Sonata sedan, set a full-year record with 225,961 sales, up 15 percent, as did the Elantra with 186, 361 units sold, up 41 percent.

Gutierrez said he was expecting strong gains from Toyota, Honda and Hyundai but not as strong as Chrysler.

Manufacturers prefer to have a 60-day supply of cars ready to sell, according to Gutierrez. Chrysler Group finished December with a 64-day supply of inventory, or 326,087 units.

GM had an inventory spanning 67 days at 583,407 units.

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