December Sales Provide Hopeful Farewell to Last YearBy Michelle Krebs January 6, 2010
U.S. auto sales in December accelerated to their best pace of the year outside last summer's Cash for Clunkers bonanza, providing a hopeful punctuation mark to the industry's worst year in decades.
Sales in December totaled 1,010,003, up 1.9 percent from December 2008, when automakers and American consumers were newly stunned by the economic debacle unfolding on several levels around them.
More important, last month, autos sold at a Seasonally Adjusted Annual Rate of 11.2 million, continuing a recovery that gradually has been building in the market for the last few months. The seasonal rate had sunk as low as 9.1 million early in 2009. And fresh from December's results, auto executives Tuesday generally said they were expecting sales in 2010 to top 11.5 million units after coming in at a total of 10.4 million for all of 2009.
Some analysts credited the holiday-sales promotional campaigns that have become ubiquitous from Thanksgiving through the end of the year. Despite the fact that the actual level of incentive spending by automakers and their dealers was little changed last month from November, all the attention to deals seemed to lure consumers to showrooms.
"Up and down the value chain, advertising was very strong," said Ken Czubay, Ford's vice president of U.S. marketing sales and service. "You could hardly ignore it if you turned on the TV, all of the merchandising of the offers in the month of December."
Earning, Not Buying, Sales
In fact, General Motors said that its average incentive in December was $3,900, compared with $6,400 a year ago. "We are going to earn [market] share at GM, not buy it," said Susan Docherty, GM's North American marketing and sales chief.
Docherty also said that GM probably had the highest month-over-month retail-sales improvement in the industry despite the fact that its December sales total was off 6 percent compared with 2008. With the exception of a small 1.5-percent drop at Chevrolet, GM's remaining core brands -- Cadillac, GMC and Buick -- all posted sales gains in December, and truck sales were stable.
Toyota "finished the year strong, with a lift in volume and anticipating a record monthly market share for the second consecutive month," said Don Esmond, senior vice president. Its December sales were 23 percent higher than a year ago.
"Emerging from the rollercoaster of 2009, the industry has gained positive momentum for a gradual recovery," Esmond said.
Ford, Chrysler Diverge
Ford capped the year with a robust 33 percent increase in sales in December compared with a year earlier. "Customers have choices now," Czubay said. "And they're walking across the street and choosing a Ford."
Among other winning products, the new Taurus continued its strong introduction in December, and sales of the new model were up nearly 90 percent for the last four months of the year compared with 2008. Sales of F-Series pickup trucks increased by 16 percent in the month over a year earlier, marking the product line's best monthly sales performance since March 2008.
Meanwhile, Chrysler could manage only a 4 percent sales decline in December. And that middling performance seemingly was fueled only by a massive year-end sell to fleet customers, which helped produce some outsized gains for several models.
The Sebring midsize sedan and convertible, an underperformer for much of the year, posted a 24 percent gain over December 2008, for example, while the Dodge Caliber and Avenger leapt to respective 83 percent and 85 percent increases compared with the prior December.
In all, Chrysler's passenger-car sales improved by 31 percent but were offset by a 14 percent setback for trucks compared with December 2008.
Other Automakers See Final Surge
Honda's performance in December was strong enough to help it secure the U.S. industry's No. 4 spot for the full year, usurping Chrysler's long hold on the position. Sales rose nearly 16 percent, led by a 17 percent rise for Honda Accord, 20 percent for Civic, and 25 percent for CR-V -- creating a December sales record for that model.
Also, Nissan capped off a disappointing year with a December surge as sales climbed 18 percent over the year-earlier month. Even sales for its struggling Infiniti brand rose by more than 10 percent for the month
Hyundai Group, including the Hyundai and Kia brands, had the largest sales increase of the Big 7 with December sales hitting 54,845 vehicles, a hefty 42 percent increase over December 2008.
Hyundai set a new December sales record at 33,797 vehicles, up 40 percent from the year earlier. Kia sales came in at 21,048 for a 43.7 percent increase.
Volkswagen of America, Inc. sold 20,387 vehicles, a 16 percent increase over December 2008, marking the sixth consecutive month of a positive year-to-year comparison.
"December's performance was encouraging, as was the six consecutive months of sales growth that we have experienced. During those six months, Volkswagen sales increased 8.2 percent over the same period of last year," said Mark Barnes, Volkswagen of America's COO.
Subaru of America kept doing in December what it had done all year long -- set new sales records without regard to the pathetic economy. The Japanese automaker sold 23,074 vehicles, up 33 percent from 17,287 sold in December 2008. And Subaru did it with little help from incentives as Edmunds.com estimates show Subaru near the bottom for costs of incentives.
"December represented another record month for Subaru, capping off the best year in the history of the company, in both sales and market share," said Tim Colbeck, senior vice president of sales, Subaru of America.
Subaru's strength for the month and year came from the newly redesigned Subaru Legacy, which saw December-to-December sales soar by 106 percent. Likewise, for the revamped Outback, which saw a month-to-month sales hike of 98 percent.
German Luxury Gains
Meanwhile, VW's corporate sibling, Audi, rode December's luxury wave with sales of 7,712 vehicles, up 17 percent from a year earlier, making it the brand's sixth-best month and the third-best December ever.
The month marked record-setting monthly sales for the Audi Q5 and A5. December marked the best month of the year for the A3 as well as the A4, A6 and Q7, even though sales of those three models were down from the year earlier. The Q5 had sales of 1,717 units in December, surpassing the record set a month earlier in November. The A5 had sales of 1,382 units.
The BMW Group, which includes the BMW and Mini brands, posted a 9 percent sales hike with December sales of 23,617 vehicles. The BMW brand prompted the sales rise with sales up 12 percent to 23,617 vehicles, while Mini sales dipped 2 percent to 3,489 vehicles.
"The numbers show a good month for us, but more importantly is the fact we saw traffic, shopping and sales evenly distributed throughout December," BMW of North America President Jim O'Donnell said in a statement. "We take this as a hopeful sign that there's a bit more rational demand building up in the premium market rather than just shopping for month-end deals."
Daimler AG reported combined December sales of its Mercedes-Benz and Smart brands of 20,889 vehicles, an increase of 0.2 percent compared to December 2008.
Mercedes-Benz closed the year on its highest note of the year. In December, Mercedes sold 20,025 vehicles, up 8 percent from December 2008.
Mercedes' strength came from the revamped E-Class, which saw sales soar by 57 percent from December-to-December. In fact, the E-Class surpassed the C-Class as Mercedes' volume seller.
After months of negative year-to-year comparisons, Porsche sales in December at 2,118 vehicles were almost on par with December 2008 sales of 2,154 vehicles. December, in fact, was Porsche's best month for the year.
Sales were buoyed by the extremely successful launch of its new Panamera. The sedan went on sale in October, and Porsche sold 521 in December for a total of 1,247 sold so far.
"Less than three months on the market, the new Panamera has enjoyed strong sales growth, and our incoming orders for this model are stronger as we enter 2010," said Detlev von Platen, Porsche Cars North America president and CEO.
Still Boxster sales were halved for the month. Cayenne and 911 sales also dropped.
Mazda sold 18,255 vehicles in December, up nearly 2 percent from a year ago, marking the Japanese brand's best month of the last four.
Sales of the new 2010 Mazda 3 rose 2 percent to 7,981 units sold. Mazda's SUVs had a good month with the CX-7 reporting a sales increase of 121.5 percent with 2,578 vehicles sold. CX-9 had sales of 2,637 units, an increase of 25.4 percent. The MX-5 Miata improved its sales performance with sales of 464 versus last December's 299. Sales of the Mazda 5, Mazda 6 and RX-8, Tribute and B-Series truck, however, were off by double-digits. -- Dale Buss, Contributing Editor