Ford, GM, Others See Sales Recover in January; Toyota Slips

Posted: February 3, 2010

With one notable exception, the auto industry showed signs of recovery in January. Battered by bad publicity and prohibited from selling eight popular models, Toyota saw its sales slip dramatically. But Ford, General Motors, Hyundai and others sales increase last month.

Industry-wide, CNN reports, “auto sales rose 6 percent in January.  Ford Motor, General Motors, Nissan and Korean automaker Hyundai Motor all reported improved January sales compared to a year ago. But Honda Motor and Chrysler both said January sales fell from the same period last year.” 

“Toyota Motor Corp suffered a sharp drop in U.S. sales last month as its massive recall and unprecedented sales halt allowed rivals to grab market share from the world's largest automaker,” Reuters reports. “Toyota's monthly sales fell 16 percent and its U.S. market share fell to its lowest level since January 2006.” February results are likely to be worse, as bad publicity over the recall grows. Toyota dealers will not be able to sell eight popular models at all until at least February 8 -- and face the difficult task of rebuilding public trust once they are allowed to sell the cars again.

The Wall Street Journal reports, “Ford Motor Co. (F), the first major auto maker to announce monthly results, on Tuesday said January sales rose 24 percent from a year ago, when vehicles sales further softened amid the growing economic downturn. Ford sold 116,534 cars and trucks last month, compared with 93,506 in January 2009.” However, the Journal cautions, “Tempering optimism of a recovery is the fact that much of the improvement will likely be attributed to sales to rental and commercial operators.”

General Motors saw a nearly 14 percent sales boost compared to January of 2009. Three of the four “core brands” GM plans to retain led the charge, propping up a poor showing by brands scheduled to be discontinued or sold. Motor Trend explains, “Buick, GMC and Chevrolet posted sales increases of 44 percent, 11 percent and 36 percent respectively. Unlike other luxury brands, Cadillac continued to struggle and posted a slight drop of 0.7 percent”

Nissan rounded out the top three, with a sales increase of almost 16 percent.

Hyundai did very well last month. AFP reports, “South Korea's top automaker Hyundai Motor said Wednesday its US sales jumped by almost a quarter last month,” giving the company close to five percent of the U.S. market.

Chrysler was the lone domestic automaker to lose ground in January. CNN notes, “Sales at Chrysler Group fell 8 percent, rather than the 6 percent increase that was expected.”

Honda’s slow sales month surprised some analysts. The company had predicted a three percent sales gain, but instead, reported a five percent drop. Company officials wonder if their main rival is to blame. “Toyota is the front-runner representing Japanese cars," Honda Executive Vice President Koichi Kondo told Reuters, "In that sense, we're somewhat worried that there may be a knock-on effect on other Japanese brands, but,” he cautions, “we'll need a little more time to gauge any impact."

Overall, it’s positive news for the industry, but some experts had expected better. The Detroit Free Press reports, “In January fell short of the increase the industry was hoping for, but industry executives remain confident the economy is recovering slowly and sales will show bigger improvements soon.”

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