Some Positive Predictions for the Automotive New Year

December has analysts and auto makers talking: if the last month of 2009 is any indication, 2010 is going to be a much better year than the last one.

In 2009, the United States auto market suffered its worst year in almost 30 years. Sales came to roughly 10.6 million vehicles as the national economy struggled, unemployment soared and credit tightened.

The year overall was abysmal for many car makers, like General Motors, Ford Motor Company and Toyota Motor Company, who all reported drops in U.S. sales numbers. In December, however, sales picked up considerably.

Ford seems to be doing especially well. In December, Ford saw its sales increase by 33% compared to December of 2008 thanks to a greater number of corporate customers and the popularity of the newly launched Taurus, Fusion and Escape models.

Ford was actually able to pick up a full point, up to 15%, of market share, which marks the first annual increase for the company since 1995. Ford’s vice president of U.S. marketing sales and service Kenneth Czubay said, “We begin the year with more positive momentum than we’ve ever had in the company’s history.”

Other huge increases for December 2009 included Toyota at 32%, Honda up 24% and Nissan with a gain of 18%. This is, of course, compared to a year ago, when it was nearly impossible to obtain credit to buy a new or used car and the national economy was on the brink of collapse.

GM, which emerged from bankruptcy this past summer, had a 7% rise in sales (excluding sales to corporate customers) in December. GM’s executive director of global market and industry analysis, Michael DiGiovanni, says, “Clearly, December came in better than we thought.”

Overall, however, GM’s sales in December were down 6%, owing to cutback in fleet sales to corporations and the shutdowns of the company’s Pontiac and Saturn brands. Market share for GM stabilized at 20%, something DiGiovanni feels is a positive sign. “That’s very encouraging given all that we’ve been through this year,” he said.

Chrysler and GM suffered the largest yearly losses of all major automakers, losing 30% and 36% respectively.

For the most part, Asian car companies fared very well last year and seemed almost immune to the global economic crisis. Hyundai saw an increase in sales of 8% over the year and its affiliate, Kia, gained 10%. Subaru of Japan rose 15% for the year.

Ford chief economist Ellen Hughes-Cromwick says U.S. auto sales may be as high as 11.5 to 12.5 million units in 2010, now that consumers are buying and credit is a bit easier to come by. However, much still depends on unemployment and overall economic stability. Hughes-Cromwick says, “There are an unusual number of wild cards this year.”

Looking ahead at the New Year, Ford’s Czubay said, “For 2010, I’m leaving my seat belt on, because I think volatility is still an element of the new norm.”

Posted in In the News

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