Image: Ford Mustangs
Associated Press
January is typically a weak month for U.S. auto sales, but automakers were expecting sales to improve over last January, when they dipped to a 26-year low because of the tough economy.
updated 2/2/2010 7:16:53 PM ET 2010-02-03T00:16:53

The U.S. auto industry rebounded from last January's sales collapse with one big exception: Toyota, which lost an estimated 20,000 sales after it stopped selling eight models because of defective gas pedals.

Last month, U.S. sales of cars and light trucks to consumers rose 6 percent from a year earlier, thanks to increases in fleet sales and strong demand for newly redesigned vehicles such as the Hyundai Tucson SUV and Buick LaCrosse sedan. Big winners included General Motors Co., Ford Motor Co., Nissan Motor Co. and Hyundai Motor Co., which all posted double-digit sales increases.

But Toyota's sales slipped 16 percent, and they could fall further as its sales stoppage drags into February. It was the first time since February 1998 that Toyota's monthly U.S. sales fell below 100,000 vehicles, according to Ward's AutoInfoBank.

Toyota's troubles helped to knock the Camry off its traditional perch as the top-selling car in the U.S. Last month the Camry ranked fifth in car sales, passed by Honda's Accord, Nissan's Altima, Toyota's Corolla and the Chevrolet Malibu. The Camry has been the top-selling car in the U.S. for the last eight years.

Toyota announced a recall of eight models, including the Camry, on Jan. 21 and halted sales of those models five days later because the accelerator pedals could stick and cause a crash The recall has affected a total of 2.3 million vehicles in the U.S. Besides the Camry, the other models in the recall include Corolla and Avalon cars, the Matrix hatchback, the Tundra pickup, the Sequoia SUV and the RAV4 and Highlander.

Bob Carter, Toyota's group vice president and general manager, said the suspended models amount to 60 percent of Toyota dealers' inventory. All eight saw sales declines. In December, most of them saw increases. The hybrid Prius, which wasn't affected in the recall, posted a 13 percent gain.

Toyota's pain wasn't a gain for other automakers. They saw more Toyota owners browsing in their showrooms but few sales despite incentives offered by GM, Ford and some New York-area Honda dealers.

Ken Czubay, Ford Motor Co.'s vice president of sales, said Toyota's actions may have hurt overall sales because consumers and dealers were unsure of the value of Toyota trade-ins.

"There was a tremendous amount of uncertainty. I don't think the month enjoyed its normal pickup on the last weekend," Czubay said.

John McEleney, who operates a Toyota dealership in Clinton, Iowa, expected January sales to be up 40 percent over last year until the automaker halted them. Now, January sales will be up 10 percent at the most, said McEleney, who is also president of the National Automobile Dealers Association.

"It died off last week because of the stop sale," he said. "It comes at a tough time for dealers coming out of the recession."

Carter said Tuesday that parts to fix the recalled vehicles are on their way to Toyota dealerships. Customers will also start receiving notices this week, staggered over time, about where and when they can have their vehicles repaired.

Carter emphasized that dealers would repair customer vehicles first and only then repair new vehicles on their lots. Dealers can resume selling vehicles affected by the recall, but he had no estimate for when that would be.

January is typically a weak month for U.S. auto sales, but automakers expected sales to improve over last January, when they dipped to a 26-year low because of the tough economy.

Sales to fleets — rental companies as well as corporate and government sales — boosted numbers last month. GM's fleet sales surged 225 percent, while Ford's jumped 154 percent. Other automakers didn't release percentages of fleet sales.

While fleet sales can hurt automakers by flooding the market and lowering resale values, Czubay said the return of those customers was a good sign. It indicated corporations are investing again and business and leisure travel is increasing.

"We are hopeful that this is an early sign of recovery," he said.

Jesse Toprak, vice president of industry trends for truecar.com, an automotive Web site, said a high percentage of fleet sales is acceptable for a month as long as it doesn't become a trend.

"If the pattern exceeds 20 to 25 percent for a long time, it's going back to the old game of overproduction, dilution of the brand and a drop in resale value," he said. GM and Ford said about 30 percent of their January sales went to fleets.

So far, only Chrysler is in the long-term trend of rising fleet sales, he said. Analysts estimate fleet amounted to about 40 percent of Chrysler sales last month. He said the company is either sending a large number of vehicles to rental companies or selling them to individuals with big incentives.

"They don't have much to sell. What they have isn't compelling," he said.

Ford's sales rose 25 percent, although its non-fleet sales fell 5 percent. Hyundai's sales rose 24 percent for the month. GM said its sales increased 14 percent, including a 3-percent rise in non-fleet sales, while Nissan's rose 16 percent.

Chrysler fell 8 percent on declining sales of Ram trucks and Jeeps, while Korean automaker Kia said its January U.S. sales were flat. Honda Motor Co. sales slipped 5 percent on weaker demand for SUVs and wagons, a surprise since Honda is the brand most likely to be considered by Toyota buyers. Honda sells few vehicles to fleets.

Mike DiGiovanni, GM's top sales analyst, said despite mixed economic news, there are enough signs of recovery for the largest U.S. automaker to raise its estimates for total U.S. sales. Last month, GM predicted sales of 11 million to 12 million for 2010, and on Tuesday, it raised the low end of the range to 11.5 million.

"We are slightly more optimistic," DiGiovanni said.

Last year's sales totaled 10.4 million cars and trucks, the lowest since 1982.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: As Toyota struggles, Ford, GM make gains

  1. Transcript of: As Toyota struggles, Ford, GM make gains

    BRIAN WILLIAMS, anchor: We have the latest tonight on Toyota 's massive recall. The Obama administration took a harder line with the company today. The secretary of transportation, Ray LaHood , said the government has not finished investigating possible safety defects. He also said there's a possibility the company could face a civil fine on top of the rest of it. And Toyota sales fell sharply in January; no surprise, since they stopped selling most of their popular cars due to the recall. Toyota sales officially dropped 16 percent. Ford and GM seemed to have taken advantage of that, double-digit gains for both US automakers. But Chrysler still struggled, down 8 percent, even with Toyota mostly out of the game.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.36%
$30K home equity loan FICO 5.07%
$75K home equity loan FICO 4.50%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 10.96%
10.86%
Cash Back Cards 16.48%
16.41%
Rewards Cards 15.99%
15.95%
Source: Bankrate.com