Image: Ford Explorer
M. Spencer Green  /  AP
A 2011 Ford Explorer rolls of the line at a Chicago plant. A year ago fleet sales were driving auto sales, but now consumers have returned to showrooms.
By
updated 2/1/2011 5:48:15 PM ET 2011-02-01T22:48:15

Americans gave automakers a confidence boost in January. They bought more cars and trucks and showed a still-fragile industry that they were ready to replace their clunkers in 2011.

Sales were expected to total around 800,000 for the month. That's still below pre-recession levels of 1 million or more, but better than last January's sales of 698,000.

Nearly all big car companies reported double-digit gains for the month, a sign that the slow recovery in U.S. auto sales that began last year remains on track. While the recovery could falter if turmoil in the Middle East pushed up gas prices or unemployment stays high, the industry was happy with what it saw last month.

"January signals a good start to the year for us, for the industry, and we think it's a good sign for the overall U.S. economy," said Don Johnson, vice president of U.S. sales for General Motors Co.

Car buyers were shopping for just about everything. Sales of recently redesigned SUVS such as the Jeep Grand Cherokee and Ford Explorer were strong. People also snapped up small cars such as the Nissan Versa and Honda Fit.

Pickups remained strong, continuing a streak that began last year thanks to growing demand from construction crews and other small businesses. Ford F-Series sales rose 30 percent. Crossovers, which combine the roominess of SUVs with car-like handling, also remained strong. Sales of the Chevrolet Equinox, for example, rose 35 percent.

Last January, rental-car companies and other businesses fueled the recovery in auto sales as they began to restock their fleets after the recession. But last month, individual buyers propelled sales.

GM said its sales to individuals rose 36 percent, while its fleet sales fell 7 percent. Ford Motor Co. saw a similar trend.

Deals are helping move the metal. Car companies threw in more discounts in January, with incentives hitting an average of $2,576 per vehicle, said Jesse Toprak, vice president of industry analysis at car pricing site TrueCar.com. Toyota Motor Corp. and Honda Motor Co. increased their incentives by 40 percent.

The lowest interest rates in decades also spurred sales. Banks and finance companies have loosened up on credit in recent months, and people with good scores can get annual interest rates as low as 4 percent on car loans, said Paul Ballew, a former chief economist at GM who is now at insurance firm Nationwide. Plus, automakers are subsidizing loans so the rates fall even lower, cutting monthly payments.

"If you're paying more than more than 2 to 3 percent on a loan, you're probably not shopping hard enough," Ballew said.

Fuel costs aren't a major factor in what customers are buying, because people have adjusted to rising gas prices, Toprak said. Prices were hovering around $3.10 per gallon at the end of last month, 44 cents higher than a year earlier. But they could be a bigger factor for car buyers if they hit $4 a gallon. Toprak said that's likely given recent unrest in Egypt and other parts of the Middle East.

GM and Chrysler Group LLC led the way in sales last month, each reporting 23 percent increases compared to last January.

GM's Cadillac brand saw a 49-percent increase thanks to demand for the new CTS coupe, which went on sale last fall. GM also sold 321 sales of the Chevrolet Volt, an electric car with a backup gas engine. The only other electric car on the market, the Nissan Leaf, sold 87 for the month.

  1. More must-see stories
    1. The Hartford Courant, Political
      Wild Wall St.

      Has the market volatility got you nervous? These cartoons may give you a little comic relief.

    2. Cyber-thieves create fake Kelley Blue Book site
    3. US says Reebok toning shoes don't really
    4. Can you live on $9 an hour? Play the game

Toyota Motor Corp. recovered from January 2010, as sales rose 17 percent. Last January, it lost an estimated 20,000 sales after it recalled eight models because of defective gas pedals. Toyota struggled to regain customers all last year, but now says it's keeping them — and stealing them from other brands.

Toyota truck sales rose 37 percent for the month, led by the RAV-4 small SUV. Car sales were up 15 percent. The Corolla compact and Prius gas-electric hybrid each rose more than 20 percent.

Ford sales rose 9 percent, partly because of a significant decrease in fleet and partly because of the discontinuation of the Mercury brand at the end of last year. Ford sold 248 Mercurys in January, 5,000 fewer than the same month a year earlier.

Other automakers reporting sales Tuesday:

  • Honda Motor Co. said sales rose 13 percent. The CR-V was Honda's top-selling model, with sales up 69 percent. Honda also increased its incentives by 45 percent, to $2,074 per vehicle, the biggest jump in the industry, according to Toprak.
  • Nissan Motor Co. sales rose 15 percent on the strength of its Rogue crossover, which saw sales jump 72 percent.
  • Kia Motors sales rose 26 percent, led by the Sorento, which blends the features of a car and an SUV, and the newly redesigned Optima sedan.

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

Explainer: 2011: The year of the reborn minivan

  • Image: Dodge Caravan
    Dodge

    The minivan has been alternately pronounced dead and revived repeatedly as various alternatives have debuted and departed. But the van chugs onward, unassailable in its position as the best vehicle for transporting the maximum number of people in the least amount of space and with the least amount of fuel.

    Minivans are easier to park than long-snouted crossover SUVs, they have more fight-reducing elbow room inside and their sliding doors mean that the young’uns don’t inflict insurance claims on adjacent cars every time they climb in or out of the van.

    Are minivans cool? TODAY Moms weigh in

    Whether 2011 marks a renaissance for minivans or just the recognition that this is a critical segment that isn’t going to be displaced, carmakers clearly agree on one thing: They need fresh products because every minivan currently on the market will be replaced during the 2011 model year, or in calendar year 2011.

    Indeed, Americans bought more than 460,000 minivans last year, and with appealing all-new choices, 2011 should attract even more minivan adherents.

    Here’s a list of new minivans for 2011.

  • Chrysler Town & Country

    Image: Town and Country
    Chrysler

    When Chrysler Chairman and CEO Lee Iacocca conceived of a “leather minivan” for the 1989 model year, the Town & Country was his notion that just because a box on wheels is practical doesn’t mean it can’t also be comfortable and luxurious. Now that model is more feature-packed than ever. Leather doesn’t set a van apart from the rest anymore, so the 2011 Town & Country has standard rear back-up camera, blind spot monitoring and rear cross-traffic alert to minimize the chance for “I didn’t see it” accidents. The 2011 Town & Country should be well-received, as the 2010 model was already America’s top-selling minivan, accounting for a quarter of all minivan sales.

  • Dodge Grand Caravan

    Image: Dodge Caravan
    Dodge

    The Dodge Caravan was the minivan that launched the minivan segment (along with the Plymouth Voyager) in 1984. As vans in the class grew not-so-mini, so did the Caravan’s name as it became the Grand Caravan. The Grand Caravan is Dodge’s version of the same vehicle as the Town & Country, and it aims to be less expensive, with less standard equipment, while offering a hint of sportiness (presumably just in case you need to race to the local Target for another box of Pampers). Key is the new 283-hp Pentastar engine, giving Dodge (and Chrysler) van drivers Hemi-style bragging rights for the most power. Cue Tim Allen.

  • Ford C-Max

    Image: Ford C-Max
    Ford

    Minivans have become maxi-vans, leaving a potential opportunity for smaller vans. Mazda has been in this space with its Mazda5 for several years, but a large brand like Ford could legitimize this so-far marginal van sub-segment. Ford terms the C-Max a 5+2 seater, recognizing that the third row is suitable for car-pooling teammates on their way to soccer practice, but is also probably not ideal for adults on long drives. Segment exclusive gadget: a sensor that lets a person carrying the van’s key to wave a leg under the back bumper to open the hatch, saving them from fumbling for keys while carrying groceries. Ford has announced plans for hybrid and plug-in hybrid versions of the C-Max for 2012, making it potentially the most fuel-thrifty family hauler.

  • Honda Odyssey

    Image: Honda Odyssey
    Honda

    Honda destroyed the myth that “minivan” equals “Chrysler” when its innovative Odyssey van set new standards for convenience features and garnered large sales. Until the Odyssey, competitors blamed the weak sales of their poor products on customers’ reflexive purchases of Chrysler vans, but Honda proved that consumers just want practical features. The new-for-2011 Odyssey proposes that consumers want a sleek, stylish minivan. It remains to be seen whether shoppers will be attracted by the styling, or whether they will continue to look past exterior appearances and concentrate on interior features. The rear seat video screen is so wide that its can show two different episodes of Dora the Explorer (or any other video content) simultaneously, side-by-side on the screen.

  • Kia KV7 concept

    Image: Kia KV7
    AFP - Getty Images

    Kia is the only minivan maker that doesn’t have a fresh family hauler headed to showrooms in coming months, if not there already. But lest anyone think that the aggressive Korean upstart is satisfied with being left behind in the face of new competition, Kia unveiled the KV7 concept at the Detroit auto show, previewing the styling for its next generation Sedona. Of course, the Sedona won’t actually have the KV7 concept’s outlandish gull wing doors, but auto show concepts are supposed to be outrageous. Just don’t expect your kids to be able to disembark from the van’s back seat like Marty McFly climbing from his time-traveling DeLorean.

  • Mazda5

    Image: Mazda5
    Mazda Motor Corportaion

    People movers are smaller in Japan, but Mazda thought its best solution to replacing its old MPV minivan was to “hit ‘em where they ain’t” by importing a smaller Japanese-market model with no direct competitor in the U.S. market. The six-seat Mazda5 retains the light weight and simplicity of manual sliding side doors that are so carefully designed that they close with the push of one finger. The 2012 iteration carries expressive new styling too. And this van’s claim to fame? Enthusiast drivers can buy one with a manual transmission if they want. Zoom zoom.

  • Nissan Quest

    Image: Nissan Quest
    AP

    Nissan has followed its own path in the minivan segment, admirably and unsuccessfully, as family van buyers didn’t buy into the Quest’s quirks. For 2011, Nissan has punted that strategy, introducing a thoroughly conventional and completely equipped contender that should easily gain the attention of Odyssey and Sienna intenders rather than scaring them off. Available dual sliding glass moonroofs allow more light and air into the van’s interior depths than is normally the case, while still permitting space for the overhead video screen.

  • Toyota Sienna

    Image: Toyota Sienna
    AP

    Toyota saw Honda’s success in challenging Chrysler directly with a full-sized contender and followed up with a bigger Sienna that was an instant hit. The 2011 Sienna continues that path with available eight-passenger seating and the only available four-cylinder engine among full-size minivans. Unfortunately, there is only a slight fuel economy benefit from the smaller engine, but it could be a step in the right direction. And the Sienna is the sole all-wheel-drive minivan on the market, making it a viable alternative to a crossover SUV for customers concerned about all-weather security.

  • Volkswagen Routan

    Image: Volkswagen Routan
    Volkswagen

    The truth is that Chrysler did not invent the minivan; Volkswagen did, way back in the 1950s. The old Beetle-based microbus was the first minivan, but the company let that legacy wither away over the decades. VW still makes vans in Germany, but they are too expensive to be competitive in the price-sensitive U.S. market. So instead the automaker sells its own version of Chrysler’s minivan, branding it the Routan. So far sales have been tepid, but a refreshed version of the van (not yet revealed) featuring the improvements seen in the new Chrysler vans should make the Routan more appealing to U.S. car buyers.

  • Ford Flex

    Image: Ford Flex
    Ford

    Ford’s Flex gets an honorary mention here. It’s almost a van, and derived from the Fairlane concept, which like the Kia KV7 debuted wearing impractically designed rear doors. In the Fairlane’s case, they were rear-hinged “suicide” doors rather than Kia’s top-hinged gullwings. Regardless, they didn’t make it to production on the Flex. Ford considered proper sliding doors to make the Flex a minivan, but consumer clinics revealed such a strong customer aversion to minivans that Ford estimated it could sell triple the number of Flexes if the vehicle were equipped with SUV-style hinged rear doors, according to Ford styling chief J Mays. But in 2010 Chrysler sold three times as many Town & Country minivans and three times as many Grand Caravan minivans as Ford sold Flexes. Maybe if it had suburban-chic sliding doors Ford would sell more of them.

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 4.51%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 10.86%
10.86%
Cash Back Cards 16.41%
16.40%
Rewards Cards 15.95%
15.94%
Source: Bankrate.com