U.S. auto sales surge 13% in January
Automakers saw a big jump in sales in January as lower gas prices and low interest rates pumped up consumers’ confidence and their spending on new vehicles.
General Motors, Ford, Chrysler, Toyota, Honda and Nissan all reported double-digit gains. Smaller companies, including Subaru and Hyundai, had their best January ever for U.S. sales.
The industry sold more than 1 million vehicles in the U.S. last month, a 13.7% gain from the same month a year earlier, according to Autodata Corp., an industry research firm.
Truck sales were especially strong, and that helped automakers with a broad range of vehicles, said Tom Libby, an analyst at IHS Automotive, an industry research firm.
That’s a trend that’s likely to continue this year.
“Those manufacturers with full-size pickups and SUVs, including GM, Ford, Fiat Chrysler Automobiles and Toyota, will enjoy sales gains over and above their rivals in today’s environment of exceptionally low fuel prices,” Libby said.
The big American automakers and Toyota — all big truck sellers — gained market share last month at the expense of the European car companies and the small Asian brands, according to Autodata.
Automakers are on pace to sell at least 17 million vehicles this year and maybe more, said Erich Merkle, a sales analyst at Ford Motor Co.
Kurt McNeil, U.S. vice president of sales operations at General Motors Co., said, “Consumers feel very good because more people are working, the U.S. economy is expanding and fuel prices are low.”
GM’s U.S. sales rose 18.3% in January to 202,786 vehicles compared with the same month a year earlier. Year-over-year pickup truck sales soared 42% for GM last month, helped by the introduction of its Colorado mid-size 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 posted a 15.6% gain in January, with sales of 177,441 vehicles, Autodata said. 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 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 increased 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.
“Looking ahead, the encouraging January results on top of positive economic news, including a seven-year high in consumer confidence, bodes well for the months ahead,” said Bill Fay, Toyota division group vice president and general manager.
“This year is off to a strong start as the sales momentum we saw in 2014 continued into January,” Fay said.
Honda Motor Co. said its sales rose 11.5% to a record 102,184 vehicles in January.
Nissan Group said its sales increased 15.1% to 104,107 vehicles, also a January record. Even Nissan, which lags behind other automakers in the truck market, said sales of its Frontier mid-size truck rose 19% last month.
As sales grew, 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.”
Conditions are unusually favorable for people to buy more expensive vehicles, said Jessica Caldwell, an analyst at car information company Edmunds.Com.
The average car loan terms are at a record high of 67.2 months, Caldwell said, while average interest rates remain “at the relatively low rate” of 4.5%.
“This means that car shoppers who assume longer loans are able to get more car for about the same monthly payment as they had made in the past,” Caldwell said.
Although the January results were strong, they looked better because of disappointing sales 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. “Subfreezing temps kept many buyers away from car lots.”
February is likely to come in as another strong month for auto sales growth for a similar reason because 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.
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