DETROIT – A steadily improving economy and strong December sales lifted the American auto industry to its best performance in five years in 2012, especially for Volkswagen and Japanese-brand vehicles, and experts say that this year could be even better.
Manufacturers on Thursday announced their final figures, which were expected to total 14.5 million – 13 percent better than in 2011.
More than three years after the federal government's $62 billion bailout of General Motors and Chrysler, Americans had plenty of incentive to buy new cars and trucks in the year just ended.
Unemployment eased. Home sales and prices rose. And the average age of a car topped 11 years in the United States, a record that spurred people to trade-in old vehicles. Banks made that easier by offering low interest rates and greater access to loans, even for buyers with poor credit.
“The U.S. light-vehicle sales market continues to be a bright spot in the tremulous global environment,” said Jeff Schuster, senior vice president of forecasting for LMC Automotive, a Detroit-area industry forecasting firm.
Sales were far better than the bleak days after the U.S. economy tanked and GM and Chrysler sought bankruptcy protection. Back then, sales fell to a 30-year low of 10.4 million, and they are still far short of the recent peak of around 17 million set in 2005.
The best part of 2012 came at the end, when special deals on pickup trucks and the usual round of sparkling holiday ads helped December sales jump by 10 percent, to more than 1.3 million, the TrueCar.com auto pricing site predicted. That would translate into an annual rate of more than 15.6 million, making December the strongest month of 2012.
Volkswagen led all major automakers, with sales rising by a staggering 35 percent and led by the redesigned Passat midsize sedan. VW sold more than five times as many Passats last year as it did in 2011.
Jesse Toprak, vice president of industry trends for TrueCar, said VW has the right mix of value and attractive vehicles and called the company “the force to watch in the next several years in the U.S. market.”
Toyota, which has recovered from the earthquake and tsunami in Japan that crimped its factories two years ago, saw sales jump by 27 percent for 2012. December sales were up by 9 percent. Unlike in 2011, the company had plenty of new cars on dealer lots for most of last year.
Honda sales rose by 24 percent for the year. Nissan and Infiniti sales were up by nearly 10 percent as the Nissan brand topped 1 million in annual sales for the first time. Hyundai sales rose by 9 percent for the year to just over 703,000, the South Korean automaker’s best year in the United States.
Chrysler, the smallest of the Detroit automakers, had the best year among U.S. companies. Its sales jumped by 21 percent for the year and by 10 percent in December. Demand was led by the Jeep Grand Cherokee sport utility vehicle, the Ram pickup truck and the Chrysler 300 luxury sedan.
But full-year sales at Ford and GM lagged. Ford edged up by 5 percent, and GM rose by only 3.7 percent for the year. For December, Ford was up by 2 percent and GM up by 5 percent.
GM executives said the company has the oldest model lineup in the industry, yet it still posted a sales increase and commanded high prices for cars and trucks. The company plans to refurbish 70 percent of its North American models in the next 18 months and expects to boost sales this year.
North American President Mark L. Reuss said the company won’t give away cars and trucks with discounts as it has in the past, especially amid its biggest product update ever.
“Give us 18 months,” Reuss said, “and you’re going to see the whole portfolio turned.”
Even though the congressional deal to avoid the “fiscal cliff” raised tax rates on the wealthiest Americans, Ford said that it doesn’t see a huge impact on auto sales.
Its chief economist, Ellen Hughes-Cromwick, said that only 2 percent of new-vehicle buyers have income in that upper tax bracket. She said Ford is more concerned about an increase in the payroll tax, which is climbing to 6.2 percent this year, from 4.2 percent in 2011 and 2012.
“We will look at that closely,” she said, “because it will crimp spending.”