December Provides Industry-Stirring Finish to 2010

December Provides Industry-Stirring Finish to 2010

By Michelle Krebs January 5, 2011

By Dale Buss, Michelle Krebs, and Bill Visnic

Last month showed up for automakers like a luxury sedan wrapped in a huge red bow in one of the many holiday-sales promotions that have dominated TV advertising for weeks.

In fact, propelled by seasonal promotions and by the momentum of an increasingly sturdy industry recovery, U.S. automakers sold about 2.2 million vehicles in December, for a 12.48 million Seasonally Adjusted Annual Rate of sales, the highest rate for any month of the year. In fact, except for the Cash for Clunker-juiced August 2009, it was the highest monthly SAAR since fall 2008, just about as the American auto market was beginning its collapse amid the Great Recession.

"It was great news," said Jessica Caldwell, head of U.S. industry analysis for Edmunds.com. "That was a good indicator. It's still a long way from the 16-million pre-recessionary norm for the SAAR, but it shows that there is some relative strength gaining in both retail and fleet sales."

The Closer You Look

In fact, Caldwell said, December sales were even stronger than they may have appeared if two other significant factors are taken into account: incentive spending, and the weather.

"Incentive spending wasn't a major player in December," she said, citing Edmund.com's proprietary True Cost of Incentives for the month at an average of about $2,500 per vehicle, about flat with the November level. "There definitely was a lot of aggressive advertisements of the deals that were out there, however," she said.

And while cold fronts and storm systems bedeviled most of the nation at various times during the month, Caldwell noted, "The weather didn't look like it had as big an effect as you might have thought. Normally, it really affects car sales, because so much of dealerships are outdoors. And the bad weather completely dominated headlines in December, from coast to coast."

GM: Crossover Surge

General Motors posted an 8-percent gain in December sales from a year ago largely on the strength of crossover sales.

GM sold 224,185 vehicles in December; only 253 of those were leftover models from GM's now defunct Hummer, Pontiac and Saturn brands. GM likes to point out that sales of the four remaining brands - Buick, Cadillac, Chevrolet and GMC - were up 16 percent compared to a year ago.

Sales of GM crossovers rose 42 percent from a year ago December. The Chevrolet Equinox and GMC Terrain set records for each model. Chevy sold 22,764 units of the Equinox for a 74-percent increase from a year ago, setting an all-time record; GMC sold 9,303 Terrains, a stunning 331-percent increase. Cadillac SRX sales soared 152 percent.

GM's full-size pickup trucks also performed well with a 29 percent December-to-December increase.

New models pitched in as well: GM delivered 326 Chevrolet Volts - all it produced; and the Cruze, launched in September, surpassed the 10,000-unit mark for the month (10,865) with more than 90 percent of those selling to retail customers.

At the same time, GM decreased its incentive spending.

Ford: Closing Out a Good One

Ford reported a 7-percent increase in December sales, to 190,976 vehicles, including a gain of 17 percent in retail sales.

That level of retail sales was Ford's highest for any month since August, 2009, when the U.S. government's "cash-for-clunkers" program was underway. Ford brand retail sales increased by 20 percent, reflecting the continued strength of the company's flagship marque. Lincoln retail sales continued to disappoint, up only 3 percent. And Mercury retail sales were down 29 percent, consistent with the company's ongoing discontinuation of the brand.

F Series enjoyed its best sales month in three years. And sales of  the new Fiesta and the midsize Fusion sedan paced Ford cars. Sales of Focus were off 10 percent, but Ken Czubay, Ford's vice president of U.S. sales, parried suggestions that sales of the newer Fiesta were significantly cannibalizing those of Focus.

"Combined retail sales of Focus and Fiesta were up 80 percent versus a year ago," he said, "and our retail share of the small-car market is almost 10 percent - about 50 percent higher than a year ago.

Toyota: Out of its Misery   

December didn't look much better to Toyota executives than January, when they announced their first big safety recalls. Toyota reported sales of 177,500 units in December, down nearly 6 percent from the year earlier.

Toyota division sales were down slightly and Lexus sales - though the luxury brand still beat out Mercedes-Benz for the year's best-selling upscale brand - were flat in December with a year earlier.

One highlight was that Prius sales, at 15,500 for the month, were up 33 percent compared with a year ago.

"That was the best winter sales month for Prius and the best month since 'cash for clunkers,'" said Don Esmond, Toyota's senior vice president of automotive operations. Esmond believed that consumer sensitivity to rising fuel prices might have helped Prius sales during the month.

Bob Carter, the Toyota division general manager, said that the company also recently had been able to boost supplies of Prius units on dealership lots significantly higher than over a couple of years ago,  when shortages of the car led to lost sales.

"We've got it up to about a 40-day supply, which is a historic level for Prius," Carter said. "And we were promoting [Prius] in our year-end sales. That, plus perceptions about fuel prices, really fueled growth in Prius sales."

Most other Toyota cars saw sales declines in December, except for Avalon, a new version of which was launched last year. Among trucks and SUVs, most Toyota products saw improved sales in December.

Honda Hits Back Hard in December

American Honda Motor Co. enjoyed a robust end-of-the-year sales month, surging 25.5 percent in December, although Honda's incentive spending was up 21 percent compared with December, 2009, according to data analysts at Edmunds.com.

Propelled by aggressive and wide-ranging incentive programs, sales for Honda's core models swelled in December: Accord sales, at 32,381, were up 18.9 percent; the Civic improved by 31.2 percent to 28,263 sales for the month. Even the Fit subcompact, which had a bumpy ride for most of 2010, was up 10.3 percent.

And Honda's crossovers performed well in December, too: the best-selling CR-V leapt 28.3 percent to 23,125 sales and the Pilot posted a 16.7-percent gain. Honda sold 876 of its new CR-Z hybrid 2-seater and 1,637 Insight hybrids.

The Element and Ridgeline were the only Honda-brand vehicles to have sales declines in December. Honda has announced the Element will be discontinued mid-year.

It was a merry Christmas at Acura, where total sales bounded 51.9 percent in December, led by an outsized 110.6-percent hike for the MDX crossover (to 5,887 sales), a sharp 55.7-percent jump for the TSX entry-level sedan and a 24.5-percent hike for the aging RDX compact crossover.

Chrysler: High-Note Finish    

Chrysler ended the year with a strong performance in December, with its sales rising by 16 percent, to 100,702 units.

In fact, December was the third month of 2010 in which Chrysler topped the 100,000-unit level, a benchmark that it routinely passed in the halcyon days before the Great Recession.

The clear star for Chrysler was the redesigned Grand Cherokee. It sold 12,753 units, more than double the year-earlier sales by the version it replaced - and, of course, at much, much lower levels of incentives. Grand Cherokee continued to build momentum even as there was more and more discussion in the news media about rising gasoline prices.

Nissan:  December Records Set

Nissan North America, which includes the Nissan and Infiniti brands, reported record December sales of 93,730 units, a 28-percent increase from a year ago.

Nissan Division sales rose 26 percent to 73,404 vehicles for its best December ever. Infiniti sales rose 37 percent to 12, 502 sold.

As has been the case all year, Nissan Division's gains were across the board, noted Al Castignetti, division general manager. Versus sales were up 50 percent for a new December record; Rogue sales, up 58 percent, also set a new December record. Despite climbing gasoline prices, sales of the large truck-based Armada SUV rose 38 percent for its best December since 2007.  Altima sales rose 24 percent. And Nissan delivered 19 units of the electric Leaf, which just went on sale in December.

Likewise, Infiniti's sales increase was mostly across the board, noted division manager Ben Poore, "from entry to mid to upper."

As with the Armada, sales of the newly redesigned QX56 rose to their highest level since December 2004. G sedan sales, thanks to the new G25 sedan, were up 58 percent; M sales were up 116 percent.

Hyundai Does December Like the Rest of the Year

Hyundai Motor America didn't sit back to rest as the year closed, racking up a 33-percent sales gain in December to make the month effectively like each that had come before it in 2010: one that produced record or near-record sales led by the brand's acknowledged new star, the 2011 Sonata midsize sedan.

Equally important, said the boss, was Hyundai's gain on the retail side, where it claims it clawed in another point of market share in 2010. The Hyundai's market-share trajectory is causing spreadsheet angst in competitors' sales offices from Wolfsburg and Tokyo to Dearborn and Detroit.

"December was the capstone to a good year for Hyundai, with our total sales results actually understating the more important gains we made at retail, where we added a full point of market share," said president and CEO John Krafcik.

One worry in the otherwise flawless Hyundai marketing machine might be the Sonata itself, which in December had another top-flight month - 15,964 sales, a 52-percent leap - but by itself accounted for nearly a third of all Hyundai sales.

Or add in the Elantra (the all-new 2011 model went on sale in December), whose 13,096 sales for the month more than doubled the 5,763 sold in December, 2009, and the still-surging Tucson compact crossover, with 4,041 sales that were more than four times the number sold last December, and the three models comprise three-quarters of Hyundai's total sales for the month. That means most other models hold bit parts in the larger Hyundai drama.

The Santa Fe crossover, for example, was off 57 percent in December and the Accent subcompact was down 67 percent. A new Accent is looming, however, and most of the other models that posted decline in December are being moved out.

At the upper end, Hyundai continues to improve Genesis sales (although incentives likely are one reason) - the Genesis lineup had 2,423 sales in December, up slightly from last year, and the all-new Equus flagship added 196 units after recently hitting showrooms.

Kia: Huge December, Huge 2010

Take your pick: if it was a Kia and it was December, the result was good.

Kia Motors America pounded out 30,444 sales to make last month its best-ever December, one that surpassed December, 2009's 21,048 sales by 43 percent. With a few exceptions, every model Kia isn't eliminating gained in December.

Kia's huge player has been the 2011 Sorento, which, along with its strong duo of compact cars, has been the major factor in propelling the brand to its new heights. In December, Kia sold 9,801 Sorentos and 108,202 for the year, compared with a total of 42,509 of the outgoing Sorento.

The angular Soul compact hatchback made an impact in the segment by selling 6,387 units in December, while the Forte compact sedan added 5,694 sales.

And watch out for the head-turning 2011 Sportage compact crossover, which sold 2,527 copies in December and has been gaining momentum since going on sale in late July.

Decliners in December included Kia's fading Sedona minivan, off 21 percent to 21,823 sales and the Rondo tall-roof mini wagon, which plunged 74 percent to 3,588 sales.

Mercedes-Benz: December Best Month of 2010

With many of its model lines in transition, Mercedes-Benz USA was no doubt pleased with a December that saw its profitable E-Class as its volume leader as the month proved to be the company's best in a 2010 that was a challenge for the luxury market.

December was a month of mixed results, nonetheless, for the German prestige brand. Although the volume C-Class was up slightly at 1.7 percent and E-Class sales improved 3.7 percent compared with December, 2009, some lines declined and if sales of the Sprinter commercial van are excluded, total Mercedes passenger-vehicle sales for the month were up just 0.3 percent compared with the prior December.

The GLK compact crossover was off a substantial 29 percent in December, to 1,684 sales, and the SL roadster slid 29.4 percent. December sales for the S-Class flagship dropped 16.8 percent, though the S-Class did finish the year up by 21.5 percent.

Big gainers in December included Mercedes' CLS coupe with a 187.4-percent jump compared with December, 2009, and the CL coupe, whose 139 sales for the month represented a 162.3-percent increase.

BMW Holds Its Own In December

December sales at BMW North America LLC were up a solid, but not spectacular, 16.9 percent, which included a 23.8 percent rise for the Mini small-car brand, which was helped by the presence of the all-new crossover model.

BMW's December was dominated by the 10,067 sales for the mainstay 3-Series; the brand's next-best seller was the 5,045 sales of the 5-Series, which gained 28.9 percent compared to December, 2009. The 1-Series was up 22.3 percent to 1,229 units, but the 6-Series coupe/convertible line fell 65.5 percent (to just 70 sales for the month) and the 7-Series flagship was off 2.4 percent.

Crossovers continue to be a strength for BMW and December was no exception. The soon-to-be-replaced X3 sprung to a 63.6-percent gain and 849 sales, the popular X5 rang up 3,939 sales for a 12.1-percent hike and the X6 delivered 859 sales, a 52.8 percent gain compared with December, 2009.

Sales at Mini totaled 4,320 in December, a 23.8-percent boost, thanks in large part by the 575 incremental sales of the new crossover model, which hit showrooms in time for the holidays. The Clubman model was down 13.4 percent, though, as the bulk of Mini's sales continue to be derived from the standard 2-door hardtop Cooper/Cooper S, which with 2,568 sales in December was up 13.7 percent compared with the prior year.

Subaru: December Record

Subaru could have sold no vehicles in December and still set a new sales record for the year. But instead it marched on, having its best December in history with sales of 26,694 vehicles

In contrast to the full year when three of Subaru's five models posted gains, every vehicle in Subaru's portfolio scored higher sales this December than last.  Outback was up 23 percent; Forester 12 percent; and Legacy 7 percent. But even the Impreza, which declined in total year sales, posted a 17-percent boost. Likewise, the Tribeca saw an increase of 9 percent, albeit on a tiny volume of 227 vehicles.

Thomas Doll, Subaru executive vice president and COO, said Subaru closed a record-setting 2010 "with an exclamation point" in December.

Mazda: Zooms to Finish Line

Mazda sold 22,479 vehicles in December for an 18-percent increase from the year earlier December.

The Mazda3 had an exceptional month with 9,023 sold, a 13-percent rise for its best December since 2007. Similarly, Mazda's crossover vehicles had outstanding performances as well. CX-7 had its best December since 2007 with sales of 3,413, a 32-percent increase. The CX-9 had its best month ever with sales of 3,292for a 25 percent increase. The Mazda 6 had a better December with 3,415 sold, a 32-percent increase and its best December since 2007.

Mazda sports cars, the MX-5 Miata and RX-8, continued their downward trend as did the people-mover Mazda5.

Big December Caps Audi's Banner Year

Audi of America Inc. didn't mess around in December, moving 16.8 percent more vehicles than it did in December, 2009, while also using the month to close out a best-ever year for U.S. sales, the first time in which Audi broke into 6-figure sales in America.

The A4 lineup led the charge, as usual, although December's 3,513 total sales represented a 1.2-percent drop compared with the prior December. The still-strengthening Q5 crossover chipped in with 2,473 sales, a 44-percent improvement compared with December, 2009. And the redesigned A8 sailed to a 378.1-percent gain, though volume, at 502 units, remains modest.

Audi's TT continues to struggle along with the rest of the sportscar market, and its December sales of a meager 64 units (a 63.4-percent plunge) was undeniably scanty, particularly when even the pricey R8 2-seater managed 119 sales. For the year, Audi sold just 1,935 TTs, a 20.9-percent decline.

Performance of its niche models aside, though, December sales demonstrated Audi could be on the verge of achieving the kind of sales volumes that truly compete with the established premium marques such as Mercedes-Benz, BMW and Lexus. And for a brand with the stated goal of quadrupling today's volumes by 2018, December was a promising indicator that the potential is there.
 

Mitsubishi: Biggest Sales Hike Since 2001

Mitsubishi sold 4,874 vehicles in December, a nearly 12-percent increase and its highest year-to-year monthly sales increase since December 2001.

"We were delighted to see increases in almost every aspect of our retail business in December," said Mitsubishi Motors North America President and CEO Shin Kurihara.

Indeed, Mitsubishi posted sales increases for almost every model  with the notable exception being the Galant, which has been missing out on the surge in midsize sedan sales.  Mitsubishi's strength lies in its Outlander and Endeavor SUVs.

Volvo: Headed in the Wrong Direction

Volvo sold 4,756 vehicles in December, a 16-percent decline from a year ago, when it was part of Ford Motor Co.

Four of Volvo's 10 models posted gains in December: V50 up 9 percent to 126 vehicles; the volume-leading XC60, up 8 percent to 1,488 vehicles; the new C70 up 7 percent to 227 units; and the S60,up 1,492 percent to 398 units.

Suzuki: 3rd Month of Increase

Though it closed the full-year with sales substantially down from 2009, Suzuki at least closed the year on a higher note.

Its December sales totaled 2,647 units, for a 40-percent increase from the year-earlier December. It marked the third consecutive month of year-to-year sales increase and closed the fourth quarter with a 36-percent rise in sales.

The credit goes to gaining strength of the Kizashi, which had sales of 869 units, a 19-percent increase from November. It was launched largely in 2010. The SX4 remained Suzuki's top seller with sales of 1,226 for the month, a 10-percent gain. The equator also so a gain - of 143 percent to 131 units sold.

Saab: Higher December Sales

Saab closed the year with higher sales this December than last, when it looked like General Motors was putting it out of business.

Saab sold 1,074 vehicles in December, compared with 868 in December 2009 when GM still owned the Swedish brand. Of those, the 9-3 had sales of 815 units; the 9-5 had sales of 259 units.

Dale Buss is a frequent contributor to AutoObserver.com. Bill Visnic is AutoObserver senior editor. Michelle Krebs is AutoObserver editor in chief.

Analysis provided by Edmunds.com analysts Jessica Caldwell, Ivan Drury and Jeremy Acevedo..


 
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Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.