Auto sales up for first time since the recession

Automakers expect to post profits in 2011, but predict it will take over a decade to return to peak sale numbers

Topics: Auto Industry, U.S. Economy,

Auto sales rose in the United States last year for the first time since the recession. They’re still far from what they were just a few years ago — but that’s just fine with the downsized auto industry, which can post profits even if they sell millions fewer cars and trucks.

For the year, car and truck sales came in at 11.6 million, up 11 percent from last year, automakers reported Tuesday. For December alone, sales were 1.14 million, also up 11 percent from a year earlier.

While the figures have some in the industry talking about a return to the glory days, it’s a fragile idea. Rising gas prices or more economic trouble could still shake the confidence of American car-buyers.

But for now, executives are optimistic about this year. General Motors, Ford and Toyota all predict sale will come in at 12.5 million to 13 million for 2011. It will take years, analysts expect, to get back to the peak sales of the middle of last decade — more like 17 million.

“The economic downturn has lasted quite a while,” says Jessica Caldwell, director of pricing and analysis for consumer website Edmunds.com. “It’s going to be slow and gradual rather than a fast bounceback.”

Toyota was the only company that sold fewer cars and trucks than in 2009. The company was stung by sudden-acceleration recalls in early 2010 and never fully recovered despite luring buyers with generous incentives. Production problems at its San Antonio plant cut its supply of Tundra and Tacoma pickup trucks, and troubles importing the Prius hybrid also hurt sales.

“We’re coming off what was arguably the most challenging time in our 53-year history,” says Don Esmond, senior vice president of Toyota’s U.S. operations. He says he is optimistic that sales will rebound in 2011.

U.S. automakers are relieved to have the past two years behind them. When the financial crisis hit in the fall of 2008, car sales plummeted. GM and Chrysler were on the brink of death, saved by a $60 billion government bailout and speedy bankruptcies that helped both companies close plants and eliminate debt. Ford didn’t declare bankruptcy or take a bailout, but it closed plants, laid off employees, and worked to lower its overall cost structure.

As a result, those companies can now make money even if sales hover below pre-recession levels.



Over the past two years, many Americans, even those who had enough money to buy a car during the recession, had been wary to commit to monthly car payments, so they put off making such a large purchase. Many opted to repair or make do with what they had.

Those buyers are easing back into the market, replacing aging vehicles. The average vehicle on U.S. roads is now 10.2 years old — the most since 1997 and a full year older than in 2007, before the recession, according to the National Automobile Dealers Association.

“With 240 million vehicles out there on the road, a lot of them are going to be ripe for replacement,” said Ellen Hughes-Cromwick, Ford’s chief economist.

Auto sales peaked in 2005 at 17.4 million and bottomed out at 10.6 million in 2009. The peak was fueled, in part, by big incentives — like the employee-discounts-for-everyone schemes that were popular in the summer of 2005. But those deals may be a thing of the past.

Don Johnson, vice president of U.S. sales for GM, said GM expects sales eventually will creep back up to 15 or 16 million, but not much higher. Car companies have downsized and they’re producing fewer vehicles, so they don’t have to resort to costly incentives in order to clear out inventory. Also, buyers have been spooked by falling home prices and high unemployment — fears that could have a lasting effect on buying patterns.

Gas prices should go up in 2011, which could change the kinds of cars buyers want. After moving away from large trucks and SUVs when gas prices spiked in the summer of 2008, Americans turned back to bigger wheels in 2010, and SUV and truck sales rose again. Car sales made up 49.8 percent of sales in 2010, while truck sales made up 50.2 percent. And trucks and SUV sales keep growing: In December, they made up 54.3 percent of total sales. That was despite gas prices that topped $3 a gallon.

“Buying behavior doesn’t change dramatically unless gas prices change dramatically,” says Rebecca Lindland, director of automotive research with IHS Automotive. “If they gradually increase, people adjust.”

That’s because Americans love their SUVs, says Jesse Toprak, vice president of industry trends and insight for the automotive website Truecar.com. The trend will continue unless gasoline rises above $3.50 per gallon, Toprak predicts.

The figures include only sales made in the United States, and don’t count sales made by U.S. automakers in other parts of the world. Globally, auto sales should hit around 65 million this year.

The U.S. car market is considered the most profitable market in the world, because buyers tend to pay higher prices for vehicles and opt for add-ins that bring up the cost.

——

AP Auto Writers Tom Krisher and Dee-Ann Durbin contributed to this report.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 14
  • Close
  • Fullscreen
  • Thumbnails

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Pilot"

    One of our first exposures to uncomfortable “Girls” sex comes early, in the pilot episode, when Hannah and Adam “get feisty” (a phrase Hannah hates) on the couch. The pair is about to go at it doggy-style when Adam nearly inserts his penis in “the wrong hole,” and after Hannah corrects him, she awkwardly explains her lack of desire to have anal sex in too many words. “Hey, let’s play the quiet game,” Adam says, thrusting. And so the romance begins.

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Elijah, "It's About Time"

    In an act of “betrayal” that messes up each of their relationships with Hannah, Marnie and Elijah open Season 2 with some more couch sex, which is almost unbearable to watch. Elijah, who is trying to explore the “hetero side” of his bisexuality, can’t maintain his erection, and the entire affair ends in very uncomfortable silence.

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Charlie, "Vagina Panic"

    Poor Charlie. While he and Marnie have their fair share of uncomfortable sex over the course of their relationship, one of the saddest moments (aside from Marnie breaking up with him during intercourse) is when Marnie encourages him to penetrate her from behind so she doesn’t have to look at him. “This feels so good,” Charlie says. “We have to go slow.” Poor sucker.

    13 of "Girls'" most cringeworthy sex scenes

    Shoshanna and camp friend Matt, "Hannah's Diary"

    We’d be remiss not to mention Shoshanna’s effort to lose her virginity to an old camp friend, who tells her how “weird” it is that he “loves to eat pussy” moments before she admits she’s never “done it” before. At least it paves the way for the uncomfortable sex we later get to watch her have with Ray?

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Hard Being Easy"

    On the heels of trying (unsuccessfully) to determine the status of her early relationship with Adam, Hannah walks by her future boyfriend’s bedroom to find him masturbating alone, in one of the strangest scenes of the first season. As Adam jerks off and refuses to let Hannah participate beyond telling him how much she likes watching, we see some serious (and odd) character development ... which ends with Hannah taking a hundred-dollar bill from Adam’s wallet, for cab fare and pizza (as well as her services).

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Booth Jonathan, "Bad Friend"

    Oh, Booth Jonathan -- the little man who “knows how to do things.” After he turns Marnie on enough to make her masturbate in the bathroom at the gallery where she works, Booth finally seals the deal in a mortifying and nearly painful to watch sex scene that tells us pretty much everything we need to know about how much Marnie is willing to fake it.

    13 of "Girls'" most cringeworthy sex scenes

    Tad and Loreen, "The Return"

    The only sex scene in the series not to feature one of the main characters, Hannah’s parents’ showertime anniversary celebration is easily one of the most cringe-worthy moments of the show’s first season. Even Hannah’s mother, Loreen, observes how embarrassing the situation is, which ends with her husband, Tad, slipping out of the shower and falling naked and unconscious on the bathroom floor.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and the pharmacist, "The Return"

    Tad and Loreen aren’t the only ones to get some during Hannah’s first season trip home to Michigan. The show’s protagonist finds herself in bed with a former high school classmate, who doesn’t exactly enjoy it when Hannah puts one of her fingers near his anus. “I’m tight like a baby, right?” Hannah asks at one point. Time to press pause.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Role-Play"

    While it’s not quite a full-on, all-out sex scene, Hannah and Adam’s attempt at role play in Season 3 is certainly an intimate encounter to behold (or not). Hannah dons a blond wig and gets a little too into her role, giving a melodramatic performance that ends with a passerby punching Adam in the face. So there’s that.

    13 of "Girls'" most cringeworthy sex scenes

    Shoshanna and Ray, "Together"

    As Shoshanna and Ray near the end of their relationship, we can see their sexual chemistry getting worse and worse. It’s no more evident than when Ray is penetrating a clothed and visibly horrified Shoshanna from behind, who ends the encounter by asking if her partner will just “get out of me.”

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Frank, "Video Games"

    Hannah, Jessa’s 19-year-old stepbrother, a graveyard and too much chatting. Need we say more about how uncomfortable this sex is to watch?

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Desi, "Iowa"

    Who gets her butt motorboated? Is this a real thing? Aside from the questionable logistics and reality of Marnie and Desi’s analingus scene, there’s also the awkward moment when Marnie confuses her partner’s declaration of love for licking her butthole with love for her. Oh, Marnie.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Vagina Panic"

    There is too much in this scene to dissect: fantasies of an 11-year-old girl with a Cabbage Patch lunchbox, excessive references to that little girl as a “slut” and Adam ripping off a condom to ejaculate on Hannah’s chest. No wonder it ends with Hannah saying she almost came.

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>