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Housing, Job Recovery Boost Auto Sales to Best Finish in 6 Years

2014 Ford F-150 pick-up truck

Robots do a quality control check of a 2014 Ford F-150 pick-up truck as it moves down the assembly line at the Ford Motor Dearborn Truck Plant in Michigan. A surge in truck sales helped boost automakers to the best finish in six years. REBECCA COOK / Reuters

An improving economy, stable fuel prices, attractive new products and low interest rates combined to boost auto sales to their best finish in six years, automakers said Friday.

It was a welcome relief after the worst industry downturn since the Great Depression and sets the table for what could be a good 2014. U.S. drivers bought about 15.5 million vehicles in 2013, and forecasts for this year range from IHS Automotive’s conservative 16.1 million to as many as 16.5 million or more.

There were a number of surprises in 2013 that helped fuel the strong sales growth. Among the most notable was a resurgent full-size pickup truck market buoyed by a nascent housing recovery. The upsurge in new housing and related businesses has given contractors the cash and confidence to replace aging trucks that they may been nursing since the economy collapsed. Detroit makers have continued to dominate the segment, none more so than Ford, which again saw its big F-Series land as not only the top-selling truck but also the best-selling vehicle overall in the American market.

For the year, that helped Ford score an overall sales increase of 10.8 percent. But another factor that worked in the maker’s favor was a modest increase in demand for domestic products in traditionally import-dominated coastal regions like California, said sales and marketing chief John Felice.

Significantly, an assortment of manufacturers finished last year reporting all-time best numbers, a list that included imports such as Audi, Subaru, Hyundai and Kia. But at least a few automakers ended 2013 on a mixed note – Toyota, for one, reporting a 1.7 percent drop in December sales, though it was nonetheless up 7.4 percent for the year as a whole.

“The auto industry was a consistent bright spot in the economic recovery throughout 2013,” said Bill Fay, Toyota division group vice president and general manager, focusing on the maker’s broader gains. “We expect the economy will continue to gain strength in 2014, with car sales rising to pre-recession levels.”

Whether the industry will reach the 17 million record set a decade ago remains to be seen, but after a brief scare last autumn, there are few signs that the car market’s momentum is slowing down.

For December, Chrysler Group LLC reported U.S. sales increased 6 percent, giving the company 45 consecutive months of growth. Meanwhile, Ford reported a modest increase of 2 percent in December, while General Motors saw its sales fall 6 percent last month.

Audi, Jaguar, Nissan and Hyundai all reported double-digit sales increases for the final month of 2013, in part driven by aggressive marketing campaigns backed by lucrative deals.

“The combination of a strong luxury market and a dramatic increase in consumer interest in both of our brands has led Jaguar Land Rover’s U.S. business to outpace the general market with a 20 percent full year increase,” said Joe Eberhardt, the newly appointed president of Jaguar Land Rover North America.

Full-year Chrysler Group sales were up 9 percent in 2013, compared with sales during 2012, marking the fourth-consecutive year of Chrysler Group sales growth. This will mark the last year the maker will report sales as an independent company. Following a New Year’s Day deal, it will be completely acquired by Italian alliance partner Fiat no later than Jan. 20.

Despite its December slide, GM sales rose 7 percent for all of 2013 and incoming CEO Mary Barra will have the advantage of having about a half-point higher market share than a year ago, a critical goal of her outgoing predecessor, Dan Akerson.

“2013 was the year that GM and the auto industry put the last traces of the recession in the rearview mirror, so now we can devote our full attention to the things that matter most to customers: compelling design, world-class quality and delivering the best ownership experience in the business,” said Kurt McNeil, vice president, U.S. sales operations.

Among the makers to set records last year was Nissan Motor Co., whose Nissan and Infiniti brands gained a collective 9.4 percent in December, and 10.5 percent for all of 2013.

Audi was another record-setter, with a 13.5 percent increase helping it top its previous high for the fourth consecutive year. But its sibling Volkswagen brand didn’t fare nearly as well. Though the German brand did again top the 400,000 mark – the first time it’s done so in two consecutive years for four decades – VW struggled and lost significant momentum in the final months of 2013, ending the year with an overall 6.9 percent decline.

While consumers rushed back to showrooms last year, they were faced with steadily increasing sticker prices – in part reflecting the increased content in vehicles as consumers opted for more options – but also a sign of a return to more of a seller’s market as factories strained to meet demand.

On the positive side, makers flooded the market with lavish sales in the final month of the year, so the estimated average transaction price for light vehicles in December increased by less than 1 percent or $197, to $32,890, according to Kelley Blue Book.

Also working in favor of buyers: a rapid increase in the availability of loans to even credit-challenged buyers. And with interest rates still low, monthly payments didn’t necessarily reflect the rise in vehicle MSRPs.

"We are optimistic heading into 2014,” said Audi of America CEO Scott Keogh. “We are certainly projecting another record year.”

Paul A. Eisenstein contributed to this report.

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