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Toyota, Ford Lead U.S. Sales Gains as Autos Fuel Growth

By Craig Trudell and Alan Ohnsman
February 02, 2013 12:01 AM EST 5 Comments
The Chrysler Group LLC 2014 Jeep Grand Cherokee SRT sits during the North American International Auto Show in Detroit.
Photographer: Daniel Acker/Bloomberg
The Chrysler Group LLC 2014 Jeep Grand Cherokee SRT sits during the North American International Auto Show in Detroit.

Toyota Motor Corp. (7203) and Ford (F) Motor Co. led the four largest automakers by U.S. sales in reporting January gains that topped estimates, as buyers return to showrooms to begin a fourth consecutive year of growth.

Toyota’s deliveries of cars and light trucks surged 27 percent and Ford’s climbed 22 percent, while General Motors Co. (GM) and Chrysler Group LLC sales each rose 16 percent, the companies said yesterday. Industrywide light-vehicle sales increased 14 percent, according to researcher Autodata Corp., matching analysts’ estimates.

Consumers are replacing cars and trucks that have aged to about 11 years on average after deferring purchases of new autos following the recession that ended in 2009. The demand is spurring carmakers to boost hiring and output, contributing a jolt to U.S. economic growth. LMC Automotive forecasts North American auto production will climb to 15.9 million vehicles this year, up 87 percent from four years earlier.

“It’s pretty clear now that we’re in pronounced recovery, so there is no question that there is a need to have the capacity to fuel that further growth,” Jeff Schuster, a Troy, Michigan-based analyst for LMC Automotive, said in a telephone interview. “The auto industry is at the highest level in terms of importance to the U.S. economy in a long time.”

The average estimates of 11 analysts surveyed by Bloomberg was for increases of 17 percent by Ford, 15 percent by Chrysler and 13 percent by GM. Toyota exceeded eight analysts’ average estimate for a 22 percent gain.

Shares Rise

GM climbed 0.3 percent to $28.17 at the close yesterday in New York, and Ford rose 0.5 percent to $13.02. Toyota’s American depositary receipts increased 2.9 percent to $98.13 and Honda’s ADRs gained 2.5 percent to $38.62.

“The biggest driver of this year’s story is going to be replacement,” Ken Czubay, Ford’s vice president of U.S. marketing, sales and service, said yesterday on a conference call. “The age of the fleet has continued to get a little bit older” and new vehicles are “getting significantly better fuel economy.”

Ford’s subcompact, compact and midsize cars all increased sales in the same month for the first time since June 2011. The Dearborn, Michigan-based company’s deliveries of F-Series pickups surged 22 percent to 46,841.

Sales for Chrysler, majority owned by Fiat SpA (F), climbed to 117,731 cars and light trucks from 101,149 a year earlier, led by demand for its Dodge models, the Auburn Hills, Michigan-based company said in a statement. The Dodge Dart compact had its best month since its introduction in June.

Boosting Output

Chrysler plans to boost production to 2.6 million vehicles in 2013, from 2.4 million last year and 2 million in 2011, said Scott Garberding, senior vice president of manufacturing. The company’s sales gain in January extended Chrysler’s stretch of year-over-year increases to 34 months.

“We’re adding some capacity, but we’re more heavily utilizing everywhere the capacity that we have,” Garberding said yesterday in an interview with Tom Keene and Sara Eisen on Bloomberg Television. “Many of our factories in the U.S. today are in fact going at full speed. Our Jeep plants are saturated” aside from a Toledo factory that is revamping for a new product.

Additional U.S. production has extended beyond domestic automakers. Toyota added about 350 jobs at its factory in Princeton, Indiana, during the second half of 2012 to build the Highlander sport-utility vehicle. Deliveries of that model surged 29 percent in January to 8,831. Another 50 will be hired this year, said Kelly Dillon, a Toyota spokeswoman at Princeton.

Growth Contribution

The auto industry contributed 14 percent of the 2.1 percent average rate of growth for gross domestic product in the recovery that began in the third quarter of 2009 to the fourth quarter of 2012, according to data from the Commerce Department.

GM’s deliveries of Chevrolet Silverado pickups climbed 32 percent to 35,445 while sales for the GMC Sierra truck increased 35 percent to 12,846. The Detroit-based automaker said inventory of full-size pickups still rose 5.7 percent from Dec. 31 to 234,342, or 117 days supply.

GM is “very comfortable” with its inventory levels as part of plans to prepare truck factories to build revamped Silverados and Sierras for the 2014 model year, said Kurt McNeil, the company’s vice president of U.S. sales operations.

“That piece of the business is picking up and being relatively robust,” McNeil said during a conference call. “We’re in a good place.”

2013 Outlook

Automakers in 2012 sold the most cars and light trucks in the U.S. in five years. GM, Ford and Toyota will lead a U.S. auto market that probably will climb to 15.1 million vehicle sales this year, the average of 18 estimates, from 14.5 million in 2012.

GM shares gained 43 percent for the past six months through yesterday, far outpacing the Standard & Poor’s 500 Index’s 10 percent increase. Over the same period, Ford rose 44 percent and Toyota shares added 50 percent.

U.S. light-vehicle sales began the year with a 14 percent increase in January to 1.04 million, Woodcliff Lake, New Jersey- based Autodata said yesterday in an e-mail. That matched the average of nine analysts’ estimates. The annualized industry sales rate for January, which is adjusted for seasonal trends, was 15.3 million, topping the 15.2 million average estimate of 17 analysts.

Honda (7267) Motor Co. and Nissan Motor Co. (7201) sales rose less than analysts’ average estimates. Honda deliveries rose 13 percent to 93,626 vehicles in January, trailing eight analysts’ average estimate for an increase of 21 percent.

Sales of the Accord surged 75 percent to 23,924, offsetting the CR-V SUV’s 6.1 percent drop to 17,809, the Tokyo-based carmaker said in a statement.

Altima Slips

Nissan sales rose 2 percent last month to 80,919, the company said in a statement, missing the 3.5 percent increase that was the average of seven estimates. Deliveries of the Altima fell 4 percent to 21,464, while Pathfinder sport-utility vehicle sales more than tripled to 6,281.

AutoNation Inc. (AN), the largest retailer of new vehicles in the U.S., yesterday reported January retail sales rose 22 percent. The Fort Lauderdale, Florida-based company is taking trade-ins from customers who have racked up more than 150,000 miles on their cars or trucks, Chief Executive Officer Mike Jackson said in a Jan. 31 interview on Bloomberg Television.

‘Personal Austerity’

“The mindset of the consumer is ‘I put my life on hold in ’08, ’09, ’10, I had my personal austerity program,” Jackson said. The consumer is saying “‘my car is worn out.’ They have to do something.”

Hyundai Motor Co. (005380) and Kia Motors Corp. (000270) combined to sell 2.3 percent more vehicles in January than a year earlier, missing six analysts’ average estimate of 7.4 percent. Deliveries of the Sonata, Seoul-based Hyundai’s top-selling model, slipped 8.6 percent to 13,247, according to a statement. Kia’s Optima sales surged 28 percent to 11,252.

Volkswagen AG (VOW) boosted deliveries of VW and Audi brand vehicles in January by 6.9 percent, falling short of the 20 percent average estimate of four analysts. The Wolfsburg, Germany-based company’s sales of its top seller, the Jetta sedan, slipped 4 percent to 10,522, while Passat (PSAT) deliveries rose 40 percent to 8,856.

To contact the reporters on this story: Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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