U.S. auto sales end ’09 on uptick; Ford surges

Tuesday January 5, 2010, 12:43 pm

DETROIT (Reuters) – Ford Motor Co (NYSE:F – News) posted a 33 percent sales gain for December as U.S. auto sales ended a crushing 2009 on an upswing after a year that saw GM and Chrysler collapse into bankruptcy and China overtake the United States as the biggest car market.

The Ford sales surge ran beyond the expectations of analysts and sent the company’s stock sharply higher. Ford shares powered above $11 to hit their highest level since August 2005.

The stock has gained 55 percent in a rally since early November and has more than quadrupled in value over the past year as investors bet that the No. 2 U.S. automaker would steer clear of the federal bailouts that wiped out equity in its domestic rivals.

“Ford’s plan is working,” Ken Czubay, the automaker’s head of U.S. sales, said in a statement.

Other automakers trailed Ford’s gain. Sales for Nissan Motor Co (Tokyo:7201.T – News) were up 18 percent in December. Chrysler’s sales dropped 4 percent.

General Motors Co was expected to post a sales decline near 9 percent.

After adjusting for population, U.S. auto sales suffered their deepest decline since World War Two in 2009. Full-year sales are expected to be just over 10.3 million vehicles, down 40 percent from where the industry began the decade in 2000.

In a historic reversal, vehicle sales in China surged to overtake the U.S. market as the world’s largest in 2009.

With a final sales tally due later this week, analysts expect China sales to have soared 44 percent to 13.5 million units in 2009. Slower growth is projected for this year.

Meanwhile, major automakers are betting that the U.S. market is poised for a gradual but steady rebound this year and next and have set production plans higher for the current quarter to restock inventories.

U.S. auto sales on average are expected to come in above an 11 million unit annualized sales rate in December. That would represent the best sales month of 2009 excluding July and August when U.S. government trade-in incentives gave sales a temporary boost through the “cash for clunkers” program.


U.S. auto dealers and analysts said December sales results were boosted by bargain-hunting shoppers taking advantage of holiday discounts and by two additional sales days in the month compared with a year earlier.

In one of the most aggressive incentive offers, GM gave its dealers up to $7,000 — a discount of almost 50 percent in some cases — to buy up remaining inventory of the discontinued Pontiac and Saturn brands still on their lots.

GM expects that move to have effectively cleared out old Pontiac and Saturn inventory, allowing it to start 2010 with a clean focus on its remaining four U.S. brands: Chevrolet, Cadillac, Buick and GMC.

GM sales results are expected to have dropped near 9 percent on an overall basis, reflecting a sharp contraction in shipments to fleet operators led by car rental agencies.

But GM sales managers are likely to point to success in increasing more profitable retail sales, lowering inventory to near record lows and cutting the overall amount that the automaker spent on incentives.

Chrysler, now controlled by Fiat SpA (Milan:FIA.MI – News), has also been battling to reduce a reliance on cut-rate fleet sales that have topped half of its overall sales in recent months.

The GM and Chrysler bankruptcies left GM held 60 percent by the U.S. Treasury and Chrysler under the management control of Fiat CEO Sergio Marchionne.

GM and Chrysler took the brunt of the industry’s collapse in 2009, but their stronger rivals were hit as well.

Toyota’s U.S. sales had plunged nearly 24 percent through November and it faces the aftermath of its largest-ever recall to fix accelerator pedals on nearly 4 million vehicles after reports of sudden bursts of acceleration that led to deadly crashes.

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