U.S. auto sales rose in January as the economy strengthened, but results were tempered by Toyota Motor Corp., which suffered a sudden decline late in the month after a recall and a sales halt of more than half its vehicles.
Toyota's monthly sales fell 16% from a year ago, dropping to less than 100,000 for the first time since 1999. Amid the fallout, Ford Motor Co. and General Motors Co. reported gains in market share and sales increases of 14% and 25%, respectively, largely attributed to increased fleet sales. Chrysler Group LLC sales declined 8%.
The seasonally adjusted annualized selling rate for all car makers in January was 10.8 million cars and light trucks, marking the third month in a row with a year-over-year sales increase for the beleaguered auto industry, according to Autodata Corp. It was a substantial lift over January 2009's rate of 9.6 million, but less than in December, when auto makers wooed customers with year-end fire sales.
Overall, car makers sold 698,378 cars and light trucks in December, up 6.3% from January 2009, Autodata said. The 2009 month had two fewer selling days.
Improving consumer confidence, economic growth and reduced joblessness helped bolster the market even as Toyota's troubles weighed on the industry.
"There was more uncertainty in the marketplace by people who owned Toyotas," said Ken Czubay, Ford's vice president of U.S. marketing. "I don't think they made decisive moves from one dealer to another; it was more that people said they didn't know what they wanted to do."
(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)
Toyota last week halted sales of vehicles that account for about 10% of the U.S. retail market while it worked on a fix for sticking gas pedals connected to unintended acceleration of some vehicles. The company announced Monday it has found a repair that should solve the problem and is shipping the fix to dealers this week.
Toyota's share of the U.S. market fell to 14.1%, nearly four points lower than a year ago and the lowest since 2006, according to the company.
A month earlier, Toyota passed General Motors in U.S. retail sales for the first time. On Tuesday, GM's chief sales analyst said the company is closing in on Toyota as again being the world's largest auto maker.
Bob Carter, Toyota's group vice president and general manager, said Toyota was on track to increased sales in January until the sales stoppage. He estimated Toyota lost 20,000 sales as a result of the action, but predicted the collateral impact on vehicles not involved in the recall will be limited.
"We are fortunate to have a very strong brand," he said on a conference call with reporters.
Analysts at Ford and GM said the controversy likely led many potential car buyers to hold off on a purchase until the issue is resolved. Toyota owners considering a new purchase were concerned about the trade-in value of their vehicles, they said, while potential Toyota shoppers may have postponed their decision.
Neither GM nor Ford had data to indicate whether they succeeded in poaching customers with incentives and low-financing offers aimed at winning over Toyota owners.
Industrywide, the strong results were offset by the fact that much of the growth came from fleet sales to rental and commercial operators, which are generally less profitable than retail sales to individual customers. Retail sales were down modestly across the industry.
The higher numbers compare with a weak year-ago January, when many businesses either cut back on purchases or were unable to get vehicles because some auto plants weren't running or financing was unavailable.
The industry is likely to see higher fleet sales in February and March, which will moderate later in the year. Auto makers, especially Detroit's Big Three, have struggled to find a balance when it comes to the fleet business. Ford has attributed its recent sales success in part to its ability to cut back on fleet sales, but said Tuesday it is happy to have the increased business.
Elsewhere, Honda Motor Co. sales fell 5% to 67,479, as car sales grew 2.7% but truck sales dropped 15%. Nissan Motor Co. reported that sales rose 16% to 62,572 vehicles, and the company said it expected to see "significant market-share gains."
Chrysler Group's sales fell 8% to 57,143, with similar drops for cars and trucks.
Hyundai Motor Co. said its January sales rose 24% to 30,503 vehicles, while Volkswagen AG's sales increased 41% to 18,019.
(Source: irco.biz)
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