New Ford Escape delivered to customerAutomakers by and large closed 2010 on an upbeat note, recording December sales that for many were the best seen in the U.S. since the federal "cash for clunkers" rebate program in 2009. The industry expects that momentum to continue into the new year, as a slowly brightening economy combined with low financing rates and generally stable fuel prices increasingly have put consumers in a buying mood.

"2011 is off to a good start as the continued increase in retail sales from the same time period last year indicates that consumers are coming back to the showrooms," says Jesse Toprak, senior analyst at online buying guide TrueCar.com. "The recovery in auto sales is fueled not only by pent-up demand but also by compelling new products and relative improvements in consumer confidence."

An 18% Rise Over January 2010

Those new products include several models from domestic automakers Ford Motor (F) and General Motors (GM), two of the big beneficiaries of 2010's increase in sales. Ford recently introduced a new Explorer midsize SUV, the most radical remaking of the vehicle since its introduction 20 years ago, and GM is riding on momentum sparked by its Chevrolet Volt plug-in hybrid, Chevy Cruze compact sedan and other models.

Overall, Toprak sees January auto sales rising about 18% compared to a year ago, with the industry selling slightly more than 825,000 units for the month. That estimate translates into annual sales of 12.71 million vehicles, after adjusting for seasonal variations (known as SAAR). January's SAAR would be slightly higher than December's 12.55 million and significantly up from 10.82 million recorded in January 2010.

Among the automakers expected to record the biggest increase in year-over-year sales are two domestic companies: Ford with a 20% rise, and Chrysler, which Toprak predicts will see its sales soar nearly 28%. Japanese heavyweights Honda Motor (HMC) and Toyota Motor (TM) are also expected to do well, with each increasing sales about 29% compared to January 2009, the analyst says.

A jump in sales at Toyota would be welcome news for the recall-besieged automaker. Having recalled more than 10 million cars worldwide last year for a variety of problems -- mostly to repair defects related to unintended acceleration, the Japanese company started 2011 with yet another big recall last week of some 1.7 million vehicles worldwide to fix fuel leaks.

Typical New Year Slowdown

Other Asian carmakers, including Japan's Nissan Motors (NSANY) and Korean sister firms Hyundai Motor and Kia Motors, are also expected to see increased sales, but at more modest levels, Toprak says.

No automaker, however, is expected to see an increase above December's stellar levels. Overall, Toprak expects industry sales to fall about 28% in January compared to the previous month.

That's because "January is typically the worst sales month of the calendar year," says Jessica Caldwell, senior analyst at Edmunds.com, who is forecasting a similar drop in month-to-month sales for the industry. She expects sales to tally about 661,000 units in January, down from approximately 947,000 last month, and anticipates automakers to record a SAAR of 12.57 million.

Smaller Incentives, Higher Profits

"January's sales figures continue a trend of steady, sustainable growth for the auto industry," Caldwell says. The numbers are even more encouraging, she says, because they were less reliant on deliveries to car-rental agencies and other commercial clients, known as fleet sales and viewed as less profitable than retail sales to consumers.

Both analysts predict that automakers will have spent less on incentives to draw traffic into showrooms in January than December, although incentive spending was likely higher compared to a year ago.


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rangeroo22

so this is momentum huh???cant wait to see what else the dems have in store for us if this is "momentum"...

January 31 2011 at 8:54 PM Report abuse +2 rate up rate down Reply
1 reply to rangeroo22's comment
lunger5019

Just remember the "moe" your buddy "W" left us in the fall of 2008

January 31 2011 at 11:30 PM Report abuse -1 rate up rate down Reply
geraldlsolis

Yes, car sales will increase in 2011, thanks to the Government continued bailouts. The country is on a high from the cocaine-fueled stimulus programs and we've become addicts to stimulus. How will the economy ever go back to supporting itself through real economic strength and not the steroids the government keeps shoveling out the window of the Treasury? Answer: we can't until we're bankrupt and there's no more money. Buy a Volt and get $7,500 from Uncle Sap. If GM sells 100,000 of these bugs that means Uncle Sap will give Government Motors another $750 MILLION BAILOUT. The madness just continues on and on. And, Government Motors executives know now that they can do whatever they want because they've been given the coveted title of TOO BIG TO FAIL by Uncle Sap. So, anytime they look shaky they can run back to Uncle Sap and ask for more bailouts to keep them alive... again. It will never end.

January 31 2011 at 6:41 PM Report abuse rate up rate down Reply
Gil

$48,000 for a chevy volt that carries "maybe" 4 people. Sure we are going to have a huge rebound in auto sales. I think not. Who wants to drive these tiny things that OBAMA thinks we should drive? Better yet, what happened to the days when a family went on vacation AND DROVE?? This President rides around in limo's and SUV's but thinks the "common folk" should buy and use his idea of compact. What a joke it is and will continue to be as long as our Government thinks this is what we want to drive, or SHOULD DRIVE.

January 31 2011 at 4:54 PM Report abuse +6 rate up rate down Reply
therule72

Sooner or later you're gonna need a new car... expect to pay top dollar... with each vehicle sporting more and more totally unnecessary junk that does NOTHING more than make you "feel good". The days of basic, economical personal transportation are OVER... power windows, door locks, remotes, sunroofs, stereo speakers, seat warmers, and the like add NOTHING to the intrinsic value of transportation. Consumers are suckers... they deserve what they get.

January 31 2011 at 12:57 PM Report abuse +8 rate up rate down Reply
3 replies to therule72's comment
renaldo1949

it has amazed me that people rant about gm and chrysler getting tax dollars, but never say a word about foreign transplants getting tax dollars.

they also like to rant about the uaw running gm and chrysler, while talking up ford, which has the same union.

can one call them stupid?

January 31 2011 at 12:21 PM Report abuse -2 rate up rate down Reply
2 replies to renaldo1949's comment
cpo1514

no ... not stupid.. Two of the three are mis-managed. One is an American icon and has just paid a bonus to all employees. The other two are in debt to the blenders.. THE US TAXPAYERS.

January 31 2011 at 2:15 PM Report abuse +3 rate up rate down Reply
ajschrod

The U.S. makers have learned their lesson--from the Japs! By lowering pay and pensions and American plants making foreign cars beginning to see retirees of their own, things are starting to equalize.

January 31 2011 at 4:15 PM Report abuse +3 rate up rate down Reply
John

Crude oil vascillated between a spot price of 71 to 91 dollars per barrel in 2010; you really consider that "stable"

January 31 2011 at 11:54 AM Report abuse +7 rate up rate down Reply
ultraz2

The US economy is still in DEEP RECESSION ---PERIOD

January 31 2011 at 11:52 AM Report abuse +14 rate up rate down Reply
3 replies to ultraz2's comment
n2paints3

Gary, may God help you and anyone who has to suffer under your way of thinking.
thank God they have you busy working somewhere so you cant screw anything else up

January 31 2011 at 11:51 AM Report abuse -3 rate up rate down Reply
ultraz2

GAS GUZZLING SUV'S ARE OUT ---GAS PRICES WILL DOUBBLE.

January 31 2011 at 11:50 AM Report abuse +4 rate up rate down Reply
n2paints3

strange, just a few days ago someone wrote an attempt at an article on how Ford's numbers were disappointing. yet here is this attempt at an article that says things are great. propaganda? manipulation? flat out lies by the media? but then again since so much of our money is going to keep china and japan going no wonder we are hurting. but hey....we are competing

January 31 2011 at 11:49 AM Report abuse +9 rate up rate down Reply