Automotive Optimism high over rise in auto sales With auto sales of 11.6M, 2010 remains below highs

By Dee-Ann Durbin

and Tom Krisher

AP Auto Writers

DETROIT (AP) -- U.S. auto sales picked up in the final months of 2010 and car companies expect them to keep climbing this year as the economy recovers and buyers grow more confident.

With sales of 11.6 million new cars and trucks, 2010 was still one of the worst years in decades. Buyers returned fitfully following the recession and big bankruptcies at GM and Chrysler. But sales took off in October and November and finished up about 11 percent last month compared with last December.

That has car companies starting to think they may reach the heights they saw in the early 2000s, when credit was cheap, incentives were rampant and sales topped 17 million.

Ford Motor Co. sales rose 15 percent and it grabbed market share from rivals for the second year in a row. General Motors Co.'s sales rose 6.3 percent while Chrysler climbed 17 percent, an impressive rebound from 2009 when the two companies restructured in bankruptcy court.

Other winners included South Korea's Hyundai, which notched record sales.

Toyota Motor Corp. continued to struggle. Its sales were flat in 2010 at 1.76 million, a casualty of the company's tarnished safety record. Toyota has recalled more than 10 million vehicles since late 2009 for various issues, including sticky gas pedals.

GM expects sales in the 13-million range in 2011, which would be back up to the level the U.S. saw in 2008. Eventually, sales will creep back up to 15 or 16 million, but not much higher, said Don Johnson, vice president of GM U.S. sales.

Car companies such as GM and Chrysler downsized during their bankruptcies and are producing fewer vehicles. They no longer have to resort to costly incentives in order to clear out inventory. Big incentives -- like the employee pricing for everyone program in the summer of 2005 -- were one reason buyers flocked to dealerships.

Also, buyers have been spooked by falling home prices and stubbornly high unemployment. But the economy is improving, and car companies are more confident about 2011.

GM sold 2.2 million vehicles in 2010, nearly 131,000 more than the prior year, even though it got rid of four brands to focus on Chevrolet, Buick, Cadillac and GMC. The increase was fueled in part by SUV-like crossovers such as the Chevrolet Equinox, which seats five people. Equinox sales rose 80 percent.

Ford's sales rose thanks to strong demand for its pickups, as construction companies and other small businesses began buying trucks again. The F-Series pickup was the best-selling vehicle in the U.S. last year.

Ford sold 1.9 million cars and trucks and stole customers from rivals including GM and Toyota. Ford said 2010 was the second year in a row it gained U.S. market share, its first back-to-back increase since 1993.

Chrysler Group LLC sold 1.1 million vehicles in 2010. Much of the increase early in the year came from sales to rental-car companies, but new vehicles fueled growth later. Sales of the new Jeep Grand Cherokee were three times higher in December than they were in the same month a year earlier.

All auto companies reported December and full-year results Tuesday. Other companies reporting were:

-- Hyundai Motor Co., which said its sales rose 24 percent for the year to 538,000 vehicles, a record for the company.

-- Nissan Motor Co., which reported an 18 percent sales jump for the year to nearly 909,000 cars and trucks.

-- Honda Motor Co., which sold over 1.2 million vehicles in 2010, a 7.6 percent increase.

These sales figures include only sales made in the United States, and don?t count sales made by U.S. automakers in other parts of the world. Globally, auto sales should hit around 65 million this year.

Published: Thu, Jan 6, 2011

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