Automakers start year with strong sales

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Chrysler and Jeep logos are shown on the exterior of a Chrysler Jeep and Dodge dealership in Vallejo, Calif.

By msnbc.com staff and wire

Car sales zoomed ahead in January, with many automakers reporting solid sales at the start of a year expected to show a steady gain in vehicle purchases.

Chrysler, now privately held and majority owned by Italy’s Fiat, was the notable standout for the month. It posted a 44 percent rise in U.S. auto sales, led by gains for its Jeep brand, while its larger domestic rival General Motors lost ground in a month marked by modest growth.

Chrysler’s sales blew past some analysts’ expectations of a 35 percent increase, demonstrating the remarkable comeback of the smallest U.S. automaker nearly three years after its taxpayer-funded bankruptcy restructuring. It also reported its first full-year profit since 1997.

GM, the largest U.S. automaker, reported a 6 percent drop in U.S. auto sales for the month, while Ford posted sales that were 7 percent higher, spurred by a 60 percent jump in sales of the Focus small car. Japan’s Toyota said its January sales in the U.S. rose 7.5 percent as momentum from the fourth quarter of last year picked up speed.

U.S. auto sales, an early indication of consumer demand each month, are expected to show an overall rise of 6 percent in January. Older cars, which now average a record 11 years old, are helping to boost new car sales as people trade them in after delaying purchases during the economic downturn.

As drivers replace their aging cars, new car sales are expected to grow through at least the start of 2012. At the same time, used vehicle prices have jumped compared to new car prices, which could drive car buyers to purchase a new car over a used one. Ford economist Jenny Lin said low interest rates as well as stable gasoline prices are also supporting vehicle sales.

So far, the annualized sales rate for January, traditionally a tepid month for auto sales, is tracking at 13.8 million vehicles, JP Morgan analyst Himanshu Patel said in a research note. This surpasses the 13.5 million sales rate that analysts had expected and is slightly higher than the nearly 13.6 million sales rate reached in December.

GM was expected to show a decline in sales compared to last January, when the automaker offered consumer incentives to jump-start sales. It has since pulled back from this approach.

“The old days of going blindly after market share are over, and most manufacturers are now concentrating on what really matters, which is profitability,” said Jesse Toprak, TrueCar.com analyst.

GM sales totaled 167,962 vehicles in January. The carmaker predicted that light vehicle sales in 2012 would range from 13.5 million to 14 million.

Some analysts had expected GM to report a 9 percent drop.

“In 2012, we will strengthen our position with more new products, an even better dealership experience and reinforce the disciplined ‘go to market’ strategy that helped us grow profitably in the United States in 2011,” GM’s U.S. sales chief Don Johnson said in a statement.

Volkswagen and Nissan reported sales gains for January. VW sales rose 48 percent to 27,209 vehicles, buoyed by the introduction of its Passat sedan. It was the German automaker’s best sales month in decades. Nissan’s U.S. sales rose 10.4 percent to 79,313.

During a call with reporters, Jonathan Browning, chief executive of VW in America, said U.S. consumer confidence was growing, but not a swift rate.

Reuters contributed to this report.

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Prius production start in the Japan

Toyota Motor Corp., said Thursday, production of three hybrid models would restart it on Monday after a massive earthquake in this month issue in the industry disrupted.

Production is factory for Prius, Lexus HS250h and Demio Tsutsumi in central Japan and Toyota Motor Kyushu in the South, again spokeswoman Shiori Hashimoto said.

All 18 factories which operated mount Toyota and Lexus vehicles in Japan, including those of group units, have been closed by the quake. A further seven plants directly from Toyota operated, the engines and other parts are also affected. The breakpoint causes loss of production of at least 140,000 vehicles production.

"We will closely monitor the situation of the parts availability when deciding on the duration of the production," she said.

Problems with power and parts have prevented other Japanese automakers restart assembly lines.

Honda Motor Co said on Thursday it would suspend passenger car production in the Japanese works until at least 3 April, extend the interruption of a week.

Japan's no. 3 automaker said that it would decide on plans on 3 April, depending on the availability of parts. Honda will continue production at the plant in Kumamoto in southern Japan motorcycle and power product on 28 March.

Honda said that it would also temporarily transferred some functions such as car development and procurement of R & D facilities in Tochigi, which was badly hit earthquake on 11 March.

Suzuki Motor Corp., said Thursday, and Friday his three Assembly remain closed factories in Japan be.

Nissan Motor Co Ltd said on Thursday that its manufacturing operations in America a regular production plan would follow at least until 1 April.

He also said, again output of the all electric Nissan leaf at the location of Oppama on Thursday recorded as battery production at Zama battery plants. Nissan said that the ability to get this issue depends on the frequency of rolling blackouts due to electrical constraints.

Nissan said its Decherd, Tennessee engine plant could supply V6 engines to Japan, to replace loss of production from its engine plant in Iwaki, but no decisions have been made.

Other manufacturers with dwindling stocks look slows production of low-selling models. For example, General Motors co has shut temporarily pickup plant in Shreveport, Louisiana.

Toyota said on Wednesday that it caused would slow down some North American production due to the disruptions by the earthquake and subsequent tsunami.

Toyota told employees and dealers was its single largest market, it too early to determine the scope, duration and a slowdown, but institutions in the United States, and in Canada and Mexico all be checked.

A spokesman for the automaker which would San Antonio, Texas, probably plants where it builds the tundra and Tacoma pickup trucks said Thursday the supply interruptions force idle of the plant.

Most of the parts for Toyota North American built vehicles come from about 500 suppliers in the region. The company said it continues to receive parts from Japan that were already in the pipeline, limit which are direct consequences of the disorder.

Barclays Capital analyst Brian Johnson said in a research note Thursday, that his best case expectation for the North American auto sector sporadic downtimes from, with US automakers less than their Japanese rivals is affected. In particular, Toyota said on many parts of several models used by each company, he.

In Germany, car manufacturers and suppliers see also cutting production bottleneck. Several companies have applied for shortened working hours to a Government-backed program.

Some merchant ships Japan Tokyo port due to the radiation exposure to crew members from the quake crippled Fukushima nuclear power plant can avoid an official industry said on Thursday.

If this is the beginning of a trend in shipping, Japan could add great delays and seaborne traffic jams in the ports face chain bottlenecks and hamper recovery efforts in the wake of March of 11 earthquake to provide. "I have heard of local agents, which do require some ships not in Tokyo due to radiation fears." I'm not sure how many, "said Tetsuya Hasegawa, operational Manager at Heisei shipping agencies in Tokyo."

Lloyd's list reported on Thursday that Claus-Peter open, one calls by Germany's largest shipping companies, that his entire fleet 110 company had suspended fears Tokyo and Yokohama because of the radiation.

Tokyo is Japan's fourth-largest port, dealing with capacity 145 million tonnes last year in particular container, according to Lloyd's list intelligence.

Copyright 2011 Thomson Reuters.

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