Detroit Surges In 2011 As Auto Sales Recover

Pent up demand, especially for SUVs and pickups, helps companies recover

Detroit's Big Three automakers -- GM, Chrysler and Ford -- had a significant turnaround year in 2011, but said Wednesday that it will be difficult to repeat the strong growth in 2012.

Chrysler said Wednesday its U.S. sales rose 26 percent last year, while Ford reported an 11 percent sales gain. GM said its U.S. sales rose 13 percent. All three companies benefited from a rebound in pickup truck and SUV sales, as well as being able to take advantage of production shortages endured by Japanese automakers after last March's earthquake.

Chrysler ended the year in December with a 37 percent increase in sales on strong demand for the Jeep Wrangler and Chrysler 200 sedan. The company, under management of Italian automaker Fiat, also had a strong overall year for Jeep brand vehicles and Ram trucks.

Ford sold 2.1 million vehicles last year, a sign of the industry's continuing recovery. It was the first time the Ford brand has passed the 2 million mark since before the recession in 2007.

For the year, automakers reported 12.78 million new vehicles sold in 2011, up 10.3% from the year earlier, according to Autodata.

Strong year for VW and Koreans

Volkswagen posted a stellar year, with sales up 26% on he strength of new hit cars--Passat and Beetle. The Koreans carmakers, Hyundai and Kia, also continued to impress consumers with strong sales to prove it. Hyundai sales were up 20%, while Kia reported sales up a whopping 36%.

Several auto companies say they see higher sales, but a slower rate of growth for the industry in 2012, owing in part to continued high unemployment and consumers holding on to their vehicles longer.

Volkswagen and GM said they expect 2012 U.S. sales to track in the range of 13.5 million to 14 million vehicles. That would put growth of between 5% and 9%. Such forecasts are not going to do much to drive up the share prices of Ford and General Motors, whose stocks have been languishing throughout 2011.

Industry research firm expects 2012 U.S. auto sales to reach 14 million vehicles.
Election year rhetoric will likely make consumers skittish about where the economy is headed, but company officials say they are encouraged by the strong fourth quarter performance of the car-buying consumer.

"Over the course of the fourth quarter of 2011, clear signs emerged that U.S. consumers are more confident and that other underpinnings of our economy are either stable or slowly improving," GM U.S. sales chief Don Johnson said. "It's now clear that auto sales should continue to grow in 2012, barring a shock to the system," he added.

Incentives lower

AOL Autos Editor-in-Chief David Kiley said he was surprised that car sales performed so well late in the year since automakers were cutting back on incentives. "It goes to show you how much pent up demand there is for new cars, and that those with steady jobs are feeling more confident about the economy and their earning power."

Incentives fell about 3 percent in December, according to TrueCar.

One of the real bright spots for the U.S. industry in 2011 was Chevrolet , which saw a sales gain of 9 percent. Sales of the new Cruze small car jumped 54 percent, while the all-new Sonic subcompact increased 42 percent compared with its predecessor car, the Aveo. "These are two of the best new cars in the industry," said AOL Autos' Kiley.

Chrysler's year was remarkable considering the terrible shape the company was in just two years ago, added Kiley. For the year, sales at Chrysler finished up 26 percent, and the automaker said it gained 1.3 percentage points of market share. "Chrysler, under Fiat's leadership, has made great progress in quality and design in just a very short time," said Kiley.

Nissan Motor Co Ltd's U.S. sales rose 7.7 percent in December.

The annual sales rate for December, according to a Thomson Reuters poll of 30 analysts, is expected to rise about 9 percent from a year earlier to 13.6 million vehicles, topping 13 million for the fourth straight month. The December 2010 sales rate was 12.5 million vehicles.

The Associated Press and Reuters contributed to this report.

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