Low gas prices, low interest rates and strong consumer confidence helped automakers post a big jump in sales in January, with General Motors, Ford, Chrysler, Honda and Nissan all reporting double-digit gains. Truck sales were especially strong.
Based on preliminary sales reports from the car companies, Ford Motor Co. estimated that the industry sold almost 1.2 million vehicles in the U.S. last month, about a 13% gain from the same month a year earlier.
Automakers are on pace to sell at least 17 million vehicles this year and maybe more, said Erich Merkle, Ford’s sales analyst.
“Consumers feel very good because more people are working, the U.S. economy is expanding and fuel prices are low,” said Kurt McNeil, GM’s U.S. vice president of sales operations.
There’s strong demand from consumers and businesses for the automaker’s trucks and crossovers, McNeil said. GM’s U.S. sales rose 18% last month to 202,786 vehicles compared with the same month a year earlier.
GM said year-over-year pickup truck sales soared 42% last month, helped by the introduction of its Colorado midsized pickup truck. Sales of just its big Chevrolet and GMC pickups rose 22% over the same month a year earlier.
“With the start of the new year, many companies have new budgets in place, and it appears a truck purchase is a popular place to spend that money,” said Karl Brauer, an analyst at Kelley Blue Book.
Ford said it posted a 15% gain in January, with sales of 178,351 vehicles. Sales of its F-Series line of pickups rose 17%.
Lower gas prices favor truck sales, said Emily Kolinski Morris, Ford’s senior economist.
Fiat Chrysler Automobiles said its sales rose 14% to 145,007 vehicles. It was the company’s best U.S. sales figure since 2007. Sales of its Ram pickup truck also rose 14% and were the best since 1999.
Toyota Motor Corp. said its January sales rose 15.6% to 169,194 vehicles. Its light-truck sales set a January record for the automaker.
“This year is off to a strong start as the sales momentum we saw in 2014 continued into January,” said Bill Fay, Toyota division group vice president and general manager.
Honda Motor Co. said its sales rose 11.5% to a record 102,184 vehicles in January.
Nissan Group said its sales rose 15.1% to 104,107 vehicles, also a January record. Even Nissan, which lags other automakers in the truck market, said sales of its Frontier midsize truck rose 19% last month.
As sales rose, Americans paid more for their cars last month.
The average transaction price for light vehicles was $32,812, up 3.5%, according to TrueCar, a car price and shopping information company.
“January turned out to be a very healthy month for several automakers, with GM, Honda and Subaru all posting net revenue gains of over 20%,” said Eric Lyman, vice president of industry insights for TrueCar. “With consumer spending rising at the highest rate since 2006, consumer sentiment at a decade high and low gasoline prices, we’re bullish on automakers’ total revenue for the year."
Though the January results were strong, they looked better because of an easy comparison with sales of a year ago, said Brauer, the Kelley Blue Book analyst.
“Keep in mind there was a ‘polar vortex’ in the early part of 2014 that limited car sales,” he said. “Sub-freezing temps kept many buyers away from car lots.”
February will likely come in as another strong month for sales growth for a similar reason as bad weather hurt sales a year ago, analysts said.
“If the weather stays moderate this month, and no major economic shifts occur, we’ll see another month of 10-plus percent sales growth in February,” Brauer said.