Industry Sees 2010 as Prelude to Even Better 2011

Industry Sees 2010 as Prelude to Even Better 2011

By Dale Buss, Michelle Krebs and Bill Visnic

Don't look now, but U.S. automakers may be counting on a stronger-than-expected finish to 2010 to launch a stronger-than-hoped-for beginning to the new year.

Industry-wide U.S. sales reached about 11.5 million units, automakers reported on Tuesday, up 11 percent from 2009 sales of about 10.4 million units.

That final tally was about what auto executives were predicting throughout 2010. But their confidence grew during a particularly robust fourth quarter, when the Seasonally Adjusted Annual Rate of sales (SAAR) actually exceeded 12 million units in each month.

This means that the American auto market finished on its strongest sustained note of the year and, in their view, presaged continued increases in the first quarter of 2011 and for the rest of the new year.

"Ninety days ago, the industry pace was moving at a very modest rate," said George Pipas, Ford's head of U.S. industry analysis. "Asked to comment then, we said it would be appropriate to assume another modest increase for the fourth quarter, in line with the increase in previous quarters. Nnnnh - the SAAR went up a million units."

By contrast, Pipas said, increases in the SAAR for the previous quarters of 2010 were only about 200,000 to 300,000 units for each period. The bottom line was that fourth-quarter sales indicated a huge pickup in demand beyond the trend lines observed earlier in the year.

Overall, the double-digit sales increase for 2010 was the result of several positive factors: a slowly firming general recovery in the U.S. economy; the return to viability of General Motors and Chrysler; strong and steady increases in demand especially for pickup trucks and SUVs; improved commercial-fleet sales; and strong new-product offerings across the board that made available an array of vehicles with much better fuel economy, quality and affordability than even just a couple of years ago.

Incentive spending that at times was aggressive and at other times judicious also boosted 2010 results.

Keep It Going

The question now, of course, is whether the industry can maintain and build significantly on the solid performance of the fourth quarter. The consensus forecast for 2011 sales began this year at 12.5 million to 13 million units, which would comprise another increase of around 10 percent or so from 2010.

Toyota executives also are adding that they foresee a 13.7-million market in 2012.

Don Johnson, General Motors' vice president of U.S. sales operations, said that the company's "outlook is quite optimistic." In fact, at 13 million to 13.5 million units, GM's prediction of full-year 2011 sales is on the very high end of industry forecasts.

On Tuesday, industry executives and economists cited several major reasons for their belief that the general economy and specific industry dynamics would support even further growth in 2011.

They included recent improvements in U.S. unemployment claims, manufacturing activity, capital-goods orders, Christmas-holiday sales, bank-credit availability and pending home sales. The tax package just passed by Congress also could boost growth, especially in the auto industry, because it includes new incentives for capital-equipment spending, such as new vehicles, said Ellen Hughes-Cromwick, Ford's chief economist.

"Even the strength in auto sales last month is a good leading indicator for the economy," she said.

Several executives also cited optimistically the manifestation of more of the "pent-up demand" among American consumers that they have been touting for several months now. The average age of autos on U.S. roads is now more than 10 years, the highest number in 13 years, meaning that replacement will be more necessary. And the Generation Y population -- the biggest demographic cohort since the baby boomers -- is just entering its family-formation years.

Bogeymen Spotted

However, the industry's immediate good cheer must be tempered somewhat by at least a few persistent realities.

For one thing, the improvement in 2010 performance came off an extremely low nadir - the worst collapse of the American market since the Great Depression. Through the mid-part of the last decade, many in the business came to consider 16-million-unit years a sort of normality.

"The only caveat," said Jessica Caldwell, senior U.S. industry analyst for Edmunds.com, "is that 2010 was the second-lowest sales year we've seen since the early Eighties. It's encouraging news, but we have to ground ourselves in the reality of what was considered normal before the downturn."

What's more, there are two hugely consequential continued drags on the U.S. economy that easily could negate further progress in 2011: the nagging high unemployment rate, still near 10 percent, and the stubborn depression in the housing market. Those are two key factors in American consumers' sense of well-being and, therefore, their predilection to make major purchases such as automobiles.

And yet another major potential bogeyman is the prospect for continued increases in fuel prices during 2011. The entire industry shudders at the memory of how vehicle sales plunged as gasoline prices pierced the $4-a-gallon level briefly in the summer of 2008.

But some executives expressed optimism that the damage this time around might not be as great even if gas prices surged past the $4-a-gallon level in 2011.

"We don't anticipate that the consumer reaction would be quite as dramatic, because the vehicles coming out now are more and more fuel efficient," said Bob Carter, general manager of the Toyota division.

GM: Four Brands Prove Better Than Eight

Validating its decision - or rather the U.S. government's decision - to shed brands, GM retained its spot as U.S. sales leader by selling 2,215,227 vehicles in 2010, 6 percent more than it sold in 2009. GM did so with four fewer brands and less incentives, allowing the Detroit automaker to fetch a higher per-vehicle price.

Sales for GM's four remaining brands - Buick, Cadillac, Chevrolet and GMC - totaled 1,804,511 vehicles in 2010 -- 118,435 more sales than all eight brands posted in 2009.

"Our sales this year reflect the impact of GM's new business model," said Don Johnson, GM vice president of U.S. sales operation.  "The consistency of results that we achieved demonstrates the focus on our brands, dealers and customers, and how we compete aggressively for every sale, every day."

Throughout 2010, GM continued to sell off inventory from its defunct Hummer, Saturn and Pontiac brands in ever-dwindling numbers. Saab was sold off and its sales are reported separately.

GM's remaining four brands posted a 21-percent sales increase over the same four brands in 2009; and a 16-percent retail rise. GM had some remaining inventory of vehicles bearing the now-defunct Hummer, Pontiac and Saturn nameplates in 2010. GM sold off Saab.

GM's gains from 2009 were across the board: across all brands and the vast majority of models. Buick had a 52 percent sales increase in 2010, earning the most improved brand based on year-over-year sales increases in the U.S. industry.

Cadillac gained 35 percent in 2010 - the most improved among luxury brands based on year-over-year sale. The SRX gave Cadillac the biggest boost, with sales soaring 153 percent from a year ago. The CTS line, which now includes a coupe and station wagon, also pitched in with an 18-percent hike. DTS and Escalade ESV also had higher sales. Reporting lower sales were the Escalade, Escalade EXT, STS and XLR.

Chevrolet, the heart of GM, improved sales by 16 percent, paced by the Equinox, which had a 74-percent rise. The Chevrolet Camaro outpaced the Ford Mustang with sales up 26 percent for the year. Malibu sales rose 23 percent. The brand-new Chevrolet Cruze, which just went on sale in September, kicked in sales of nearly 25,000 units, more than 90 percent of which were retail, not fleet. GM sold 326 Volts in December - all that it built.

GMC sales increased 29 percent for 2010 soared 29 percent on the strength of the Terrain, which had a whopping 331-percent sales increase. The Acadia posted sales 27 percent higher than 2009. Sierra rose along with the entire pickup market.

Crossovers proved to be a strong category for GM. Fuller told analysts and reporters in Tuesday's conference call that crossovers account for 26 percent of GM's total sales, compared with only 8 percent in 2005; it currently is 22 percent of the industry. GM sold 567,458 crossovers, up 50 percent in total from the year earlier.

GM also sold more trucks in 2010 - 520,444 of them for a 17-percent rise over 2009.

Ford: Solidifying Its Rise

There was a time back in the mid-Eighties when Ford's top executives were so confident in how they had streamlined the company and improved its products that they practically welcomed the prospect of another recession, so that Ford could demonstrate how far it had come.

Current Ford CEO Alan Mulally and his lieutenants aren't exactly doing that today. But they definitely are basking in the evidence that Ford not only has put together the best back-to-back years of improvement in recent industry history, but also that the company did so at a time of huge economic distress in America - and without having to resort to government bailouts as their two domestic rivals did.

So on Tuesday, Ford executives were in their crowning glory discussing the fact that the automaker had boosted 2010 sales by 19 percent (excluding Volvo numbers) over 2009, the biggest increase of any full-line automaker and multiples better than their two biggest rivals, GM and Toyota. The 2010 performance comprised Ford's largest full-year increase in sales since 1984. And the executives happily added that Ford's back-to-back years of market-share increases were the company's first since 1993.

"It was one of Ford's best years ever," Pipas said.

Edmunds'com's Caldwell agreed. "They had a lot of success with their vehicles, from small to large," she said. "And they're in a good position to continue that growth in 2011."

In fact, all categories of Ford products saw higher sales. "This shows that consideration for Ford is growing up and down the product line," said Ken Czubay, Ford's vice president of U.S. sales. "The appeal isn't limited to a single product."

Also, Ford's share of the crucial commercial-fleet market increased by eight percentage points, to 38 percent, he said.

And yet, several single products shone as well. For example, Ford's F Series trucks were the only vehicle in the U.S. market to reach the half-million-sales level in 201, Czubay said.

Each age group also provided increases, especially the prized Generation Y demographic. Every region of the U.S. provided sales increases as well, Czubay said, noting that Ford was the only full-line manufacturer to gain retail share in the West during 2010.

Ford's new Fiesta subcompact fueled much of the company's improved performance out West. The Los Angeles area was the best sales region for the car for the third month in a row, Czubay said, and the West accounted for about 10 percent of all Fiesta sales, compared with just 5 percent of overall Ford sales.

"That's a watershed number," he said, "which going forward has huge implications for Ford .. California has become an emerging market for our cars and crossovers [with] results that are far beyond our expectations."

The single significant black mark for Ford, in terms of its performance relative to the rest of the market in 2010, was Lincoln. Despite being able to tout a product line that has been almost completely overhauled over the last two or three years, Ford's luxury marque didn't generate anywhere near the performance improvements of the Ford brand.

Lincoln's sales rose less than 4 percent for the whole year. By comparison, sales of the soon-to-be-defunct Mercury brand actually rose by 1 percent in 2010 as well.

Toyota: Best to Forget

Toyota's annus horribilus ended about as sourly as it began. And so there was no one in the industry more eager to talk about 2011 than Toyota executives on Tuesday.

"We're coming off arguably the worst year in our 53-year history," said Don Esmond, Toyota's senior vice president of automotive operations. "We've never headed into a new year with as much excitement and anticipation."

For the year, Toyota posted a sales decline of 0.4 percent and lost market share even to General Motors. That, of course, occurred largely because of a spate of Toyota safety recalls that began in January, came erratically throughout the rest of the year, and badly dinged the confidence of American consumers in a brand that previously had represented the ultimate in quality and reliability.

"2010 essentially was an 11-month year for us," Esmond said, because Toyota stopped production of some key models during the first quarter to make sure it had exorcised the problems behind the biggest safety recalls. "The common perception is that Toyota has been reeling this year because of those recalls."

But he argued that the once-vaunted loyalty of Toyota owners has been returning to its historical levels over the last few months. And Esmond's next point was that Toyota had managed to notch some other significant accomplishments during 2010, including holding on to the No. 1 retail market share in the United States; placing the Camry as the best-selling car in America for the ninth straight year; and seeing Lexus hang onto is status as the nation's leading luxury brand once again, beating out challenger Mercedes-Benz.

But the fact is that the recalls weren't the only thing that had Toyota reeling during 2010. Its other major weak spot was an aging product lineup. "The new products we introduced, including the Sienna [minivan] and Avalon [full-size car], were for the most part relatively low-volume models," conceded Esmond.

On Tuesday, Toyota executives promised that a stream of 10 new or updated products this year will help them regain appeal for the entire product line and restore their once-renowned mastery of the product cycle.

Those new products will include a larger version of the Prius hybrid that Toyota plans to unveil at the North American International Auto Show in Detroit next week, as well as a new Scion IQ model and a new Lexus CT200h premium-compact.

"When all the smoke clears, if you look at where the growth was in 2010 [in the industry], a lot of it was trucks and SUVs," Esmond said. "This year, there probably will be increased demand on the car side," where Toyota fares much better - and where most of its new products are aimed.

Not so fast, Caldwell said. "Hyundai, Kia and other manufacturers gained share at Toyota's expense during 2010, and it will be difficult for Toyota to regain market share, particularly because they're still carrying over most of an old stable of products," she said. Among other staples of Toyota's lineup, Camry won't be all-new in 2011. "New products are more important than ever when you're recovering."

The marketplace "is a lot more competitive than it was even two or three years ago," Caldwell continued. So Toyota's 2011 products "are going to have to be good."

At the same time, a distinct bright spot for the company was the 2010 performance of its Lexus luxury brand, which emerged as the leading upscale marque in the U.S. Lexus sales climbed 7 percent for the year.

Honda: 2010 Shoulda Been Better

Main rival Toyota Motor Corp. reeling. Belt-tightening Americans looking to cut their gasoline costs. The nation in a downsizing mood after a protracted recession.

It all should have played into Honda Motor Co. Ltd.'s hands, its traditional strengths being 4-cylinder economy and sensibly-sized cars and crossovers.

Instead, Honda could carve out only a 7-percent gain in 2010, a year in which many competitors managed to do better - seemingly with less.

Although the mainstay Accord and Civic models held their own - Accord finished 2010 with a plump 311,382 sales and the Civic 260,218 - those numbers amounted to rather meager respective improvements of 8.1 percent and 0.8 percent over 2009, one of the more dismal years in auto sales history.

More tellingly, the two models - both long into their product cycles - comprised 46 percent of Honda's total sales of 1,230,480 in 2010. Include the popular CR-V crossover's 203,714 sales (a 7.2-percent improvement over 2009) with the Accord and Civic and it could be argued Honda made little impact with the other eight models it sells, much less the six upscale cars and crossovers sold by the Acura division, whose awkwardly chiseled models forged a 27-percent gain in 2010 compared with the meager 105,723 units the entire division moved in 2009.

Honda might even be questioning the 108,132 Odyssey minivans it retailed last year. It's a sturdy enough number in the minivan segment (only Chrysler beat Honda, selling a combined 215,598 of its Chrysler Town & Country and Dodge Caravan), but the minivan market isn't exactly projecting for a big upswing and there remain only three genuine players.

And Honda sure hasn't found the magic elixir that tempts the hybrid customer, either. It's Insight remains an abject failure with 20,962 sales for the entirety of 2010, a 2.6-percent uptick over last year, while the highly-anticipated CR-Z 2-seater - the supposed melding of hybrid technology with the wonderful karma from original CRX - emerged as another broken egg in Honda's product-development nest, averaging less than 1,500 sales per month since launching in late August.

Critics have for some time feasted on the seeming increasing futility of Honda's Acura unit, wondering about the upscale division's engineering and styling directions and its ability to compete with luxury stalwart Lexus and the always-formidable German prestige contingent. In 2010, Acura's best-seller was the MDX midsize crossover, which moved a respectable 47,210 units.

But Acura's flagship, the RL sedan, screeched to a total of just 2,037 sales in 2010 and Honda executives in Japan at one point had to deny a report the company would axe the range-topping sedan. The pricey new ZDX crossover-wagon was judged violently unpretty and too bulky, even by the ever-bloating measure of this brand that once prided itself on representing the essence of Honda's lighter-weight/smaller-engine principles - and struggled to sell 3,259 examples in 2010, its first full year on the market.

It wasn't an awful year for Honda - it's 1,230,480 sales keep it firmly in the upper echelons of the market, comfortably ahead of competitors such as Nissan, Chrysler and Volkswagen - but 2010 could have been so much more. Just ask Hyundai.

Chrysler: Beating the Odds

Prognosticators were willing to bet that the federal government would never allow GM to fail, so its continued existence wasn't much a matter of conjecture after the company filed for bankruptcy about a year and a half ago. But Chrysler was another story.

U.S. taxpayers, Chrysler employees and the United Auto Workers already had rescued the company once, in the early Eighties, and in mid-2009 it looked as though Chrysler might not survive another brush with death - even after Fiat took over its carcass and the federal government recapitalized it.

But on Tuesday, Chrysler executives were able to brush past all the doubters and report that its annual sales once again passed its traditional standard of one million vehicles. Chrysler sold nearly 1.1 million vehicles in 2010, actually, up 17 percent from its dismal 2009 performance.

"We are extremely proud of the sales strides that we made during this transition year," said Fred Diaz, Chrysler's lead executive for U.S. sales, in a profound understatement. Yet he noted that the 1.1-million sales plateau was "consistent with [the] sales objective that we presented in our Nov. 4, 2009, five-year business plan."

Caldwell pointed out that Chrysler enjoyed a stronger percentage sales increase than its federally rescued garage-mate, GM. "It's surprising that Chrysler came out on top," she said. "GM was shedding brands, sure. But a lot of people didn't even expect Chrysler to be in business by this time."

Still, no automaker in the American market did more with smoke, mirrors, a little bit of new sheet metal - and unrivaled aggressive incentive spending -- than Chrysler did in 2010. Diaz pointed out that the company "launched 16 all-new or significantly improved models last year," but in reality only a very few changed substantially, mainly the hot-selling new Jeep Grand Cherokee that was launched last fall.

And once again, the workhorses of Chrysler's lineup were the Jeep and Ram brands. Jeep sales increased by 26 percent for the year, thanks in part to the Grand Cherokee but also to double-digit sales improvements by four of the other five Jeep products. Ram sales alone accounted for more than one-fifth of Chrysler's overall results, rising 9 percent compared with 2009 in a hotly competitive pickup-truck segment.

Having survived the Great Recession and the slow recovery of 2010, Chrysler arguably is in position to perform much better in 2011, with a stream of significantly reworked and new models in its launch sequence, including the first significant offerings based on Fiat models.

And with its viability seemingly ensured, Chrysler likely will be able to gain consideration now from many of the American consumers who once wrote it off. Now they've got reason to look at Chrysler again.

Nissan: Strong Finish; Optimistic Beginning

Nissan North America, which includes the Nissan and Infiniti brands, rivaled Ford in terms of year-over year increase. The Japanese automaker sold 908,570 vehicles in 2010, an 18-percent increase from 2009, the same increase Ford experienced.

Nissan Division sales rose 17 percent to 805,159 vehicles; Infiniti sales increased 28 percent to 103,411 vehicles.

 "2010 was a difficult year with an encouraging ending -- one that would lead to optimism in 2011," Al Castignetti, vice president and Nissan division general manager, told AutoObserver.com in an interview.

Nearly every model in Nissan division's line-up saw a year-over-year, double-digit increase. The exceptions were the outgoing Quest minivan that has been recently been redesigned, the quirky Nissan Cube and Nissan sports cars, the GT-R and 370Z.

While Nissan's small cars turned in strong sales performances for the year, the division's trucks and large SUVs, notably the Nissan Armada, posted the biggest sales increases.

Despite all of the publicity around upstart Audi in the luxury segment, Infiniti beat its German competitor in 2010, despite Audi's record performance. Infiniti sales rose 28 percent from 2009.

And as it Nissan, it was its large, body-on-frame QX56, redesigned in 2010, that led the charge. Its sales were up a hefty 85 percent from a year ago. Also redesigned for 2010, the new M saw a 72-percent hike in sales. The G sedan and G coupe posted double digit increases; the EX a 5 percent gain. Only the FX lost ground.

"The confidence of the luxury buyer is back and it is showing up in sales," said Ben Poore, Infiniti general manager. He noted the luxury percentage of total U.S. vehicle sales has returned of late to pre-recession levels.

Hyundai Bolts for Open Ground

Most rivals struggled for meaningful volume gains in 2010, a year of modest rebound. Not so Hyundai Motor America. The company set an all-time sales record and finally chiseled its logo into a long-cherished milestone: surpassing a half-million total U.S. sales.

Along for the ride are substantial gains in numerous industry metrics, including resale value and market share. Particularly retail share, Hyundai brags.

Despite even less dependence on fleet sales, Hyundai in fact breezed past the treasured half-million mark, totaling 538,228 sales in 2010, a thunderous jump of 103,164 deliveries compared with 2009, which itself was a strong year for the South Korean automaker. Some of the magic has come from an aggressive brew of incentives and undercutting pricing, but most of the answer lies in the time-honored ingredient: strong products. A rash of them.

The foundation is the all-conquering Sonata, an assertively styled shark swimming among a school of bland - though well-established - guppies such as Honda Accord and Toyota Camry. Sonata jumped from 120,028 sales in this cutthroat segment that suddenly became a favored haven for recession buyers to 196,623 this year - a 61-percent gain. It's been shock and awe for rivals.

The 2010 Tucson compact crossover, also all-new this year, is another Hyundai making its presence known. The first-generation Tucson never was much of a player, but the all-new variant undercuts rivals by thousands, in many cases, and delivers better fuel economy. The Tucson also fronts Hyundai's more-confident, more fluid styling and has rocketed from 15,411 sales in 2009 to 39,594 this year.

And although many believed the Genesis sedan stretched the boundaries of Hyundai's upscale potential, combined with the sport-oriented coupe lineup, the Genesis nameplate climbed from 21,889 sales in 2009 to 29,122 in 2010.

Hyundai had a few dogs in 2010, but most are models on the way out or ready for replacement, including the Azera and the Elantra; an all-new 2011 Elantra launched in December. Hyundai may need to sort out its larger crossover models, though: the Santa Fe midsizer dropped about 4 percent in 2010 to 76,680 units and the Veracruz dropped from 10,210 sales in 2009 to a scanty 8,741 sales last year.

Kia: Record Year

For sixteen consecutive years, Kia Motors America - sister brand to Hyundai Motor America - has increased its U.S. market share, and the company combined this feat with a record sales volume in 2010, selling a heady 356,268 vehicles. The number amounted to a gain of 18.7 percent compared with 2009.

The Georgia-built Sorento topped Kia's sales chart every month in 2010 and became the first Kia model to sell more than 100,000 units in a single U.S. sales year. The 2011 Sorento sold 108,202 for the year, accounting for nearly a third of the brand's total sales.

But Kia's ledger is dotted with big contributors, including the formidable new duo of the Soul compact hatchback (67,110 sales in 2010) and the Forte compact sedan, which found 68,500 buyers for the year. The 2011 Sportage compact crossover chipped in 12,097 sales in little more than a half year of availability and Kia expects much more this year from the angular, avant-garde Sportage.

Losers for the year included a slight decline for the out-of-touch Borrego body-on-frame SUV (9,835 sales for the year) and a sharp dropoff for the Rondo tall-roof wagon, from 14,206 sales in 2009 to just 3,588 last year. Other models being moved out were down from 2009, including the Rio compact car and the Sedona minivan.

"Kia has experienced unprecedented growth in the U.S., including a 48-percent market share increase since 2008 to our current position of more than 3 percent, and our rapid expansion is a direct result of our commitment to delivering vehicles with world-class design that embody our core principles of quality, safety, technology and value," said Byung Mo Ahn, group president and CEO of KMA and Kia Motors Manufacturing Georgia (KMMG), in a statement.

Subaru: Records Made to be Broken

Subaru of America did it again - broke its annual sales record.

Subaru sold 263,820 vehicles in 2010, 22-percent more than in recession-ridden 2009, which was the Japanese maker's previous record year.  In fact, by Nov. 3, Subaru had broken its 2009 record.

And Subaru is setting records with basically three core models within its five-vehicle line. The Outback was Subaru's highest volume vehicle selling 93,148 units for a 68-percent increase.  Forester ranked close second with sales of 85,080 units a 9-percent increase from 2009. Subaru sold 38,725 Legacy models for a 25-percent hike. Impreza was off 5 percent; Tribeca was down 58 percent to less than 2,500 models sold for the year.

Can Subaru score a trifecta? Its management thinks so.

Thomas Doll, Subaru executive vice president and COO, predicts 2011 will be another record setter for Subaru as it has "a lot of upside potential."

Added Timothy Colbeck, Subaru's vice president of sales. "We are well pointed for future growth and records. Our products, dealer network and brand are at their best ever and as the industry recovers, we are in a great position to capitalize even further."

Mazda: Rises on Mazda3, CUVs

Mazda sold 229,566 vehicles in 2010 for an 11-percent increase from 2009.

"Coming into this year, we were hopeful that the economy and industry would begin to show signs of recovery following a tumultuous 2009, so we're extremely pleased to close out 2010 on a positive note," said Jim O'Sullivan, president and CEO, MNAO.

The small Mazda3 remained the brand's top seller again this year with sales of 106,353, an 11-percent increase. Mazda's crossovers saw the largest percentage increases. More than 28,000 units of both the CX-7 and CX-9 were sold in 2010 for increases of 40 percent and 37 percent respectively. The Mazda6 eked out a 3-percent sales hike.

Mazda introduced the Mazda2 in 2010; it logged 3,021 sales for the year. Mazda's sports cars - -the MX-5 Miata and RX-8 got pummeled along with the rest of the segment with sales off 19 and 49 percent respectively. The Mazda5 saw a sales slide of 15 percent.

"Gains in consumer confidence and the fact that we've remained true to our brand were all factors in building sales momentum this year that we believe will lead to an even brighter 2011 for Mazda," added O'Sullivan.

Mercedes-Benz: Great Finish But Still No. 2

December proved to be the best sales month of 2010 for Mercedes-Benz USA, but even the strong finish, Mercedes pulled up in second place behind Toyota Motor Corp.'s Lexus as the top-selling luxury brand in the U.S.

For the year, Mercedes sold 225,007, which included the 8,557 Sprinter commercial vans sold thru Mercedes dealers. The number represented an 18-percent gain over 2009 but left Mercedes a few thousand units short of Lexus' 229,329 U.S. sales.

Mercedes' C-Class and E-Class ran neck-and-neck to be the brand's best-seller, with the C-Class and its 58,785 sales for all of 2010 bowing to the midsize E-Class and its 60,922 sales for the year. The numbers represented respective gains of 12.1 percent and 41.4 percent.

In fact, almost all of Mercedes-Benz's "volume" vehicle lines finished 2010 with positive sales results: sales for the S-Class flagship were up 21.5 percent (to 13,608) and the M-Class, R-Class and GL-Class utility vehicles improved by 15.1 percent, 4 percent and 32.8 percent. The GLK compact crossover was the only mainstream-oriented line to decline for the year, with sales down 4.5 percent to 20,946 units compared to 21,944 sales in 2009.

Mercedes sold just 1,035 CL coupes in 2010 (-15.2 percent), while other decliners included the SL roadster (-40.7 percent to 2,385 units) and the SLK, which was off 22.8 percent to a meager 1,980 sales; Mercedes plans to introduce an all-new SLK later this year.

"Despite the challenges of a slow recovery, we see good indicators in terms of our sales volume throughout the model range," said Ernst Lieb, president and CEO of MBUSA. "As virtually all third-party indicators show, customers are confident about the Mercedes-Benz brand and we think that will translate to even stronger momentum going forward," Lieb added. 

 
BMW Third in 2010 Lux Battle

Fewer than 10,000 units separated first from third in the battle to be the No. 1 luxury brand in the U.S., and BMW of North America LLC's 220,113 sales, though a 12-percent gain over 2009's total, left the purveyors of the Ultimate Driving Machine in third place, trailing chief competitor Mercedes-Benz (225,007) and Toyota Motor Corp.'s Lexus, which remained the luxury-vehicle sales leader in 2010 with 229,329 sales.

BMW got a solid 2010 performance from its best-selling 3-Series line, which gained 10.9 percent for the year and moved 100,910 units (almost more than rival Audi's total sales from nine U.S. models), as well as a strong move for the redesigned X5 midsize crossover, which surged to a 32.2-percent gain in 2010, selling 35,776.

But the final tally for the all-new 5-Series, which went on sale in the Spring, had to be a disappointment: 2010 sales for BMW's hallmark midsize sedan ended down 1.5 percent compared with the total from a weak 2009. A 17.4-percent climb for the entry-level 1-Series, at 12,132 sales in 2010, likely was little balm for the 5-Series decline, a model that certainly carries heftier profits than the compact 1-Series.

Except for the 5-Series and 6-Series (-31.9 percent), all of BMW's lineup generated sales gains for 2010, including the Z4 roadster's 8-percent improvement; even the little-loved X3 compact crossover (an all-new model soon will be in showrooms) sold eight more units than it did in 2009.

BMW's Mini small-car unit held on for a 0.9-percent gain in 2010, selling a total of 45,644 from its now 4-model lineup. The 2-door Cooper hardtop/convertible line was up 5.4 percent and 13.1 percent, but Mini intenders gave scant love to the larger Clubman, whose sales slid 23 percent for the year, to a total of 8,389 units.

Mini's all-new crossover model went on sale in December and added 575 units to the brand's total sales for 2010, which was just 419 units more than the total for 2009 - so without the incremental December sales of the new crossover model, Mini's total sales for 2010 would have trailed 2009 by 156 cars.      

Audi: 2010 The Best Of Years

Although must luxury makers won't look back too fondly on the past year, Audi of America Inc. won't be in that camp: 2010, ironically, was a record U.S. sales year for the premium-vehicle unit of the Volkswagen Group and marked the first time Audi sold more than 100,000 vehicles in America.

Audi's U.S. sales total of 101,629 in 2010 represented the brand's best-ever year and surpassed the previous record in 2007, while last year's sales also were 22.9 percent better than 2009's 82,717 deliveries.

Audi's best-seller was the A4 lineup, although its 34,672 sales marked a 6.5-percent decline from 2009. The brand's second-best seller in 2010, however, the Q5 compact crossover, gushed to a 70.5-percent increase, with 23,518 units sold.

The A4 and the TT sportscar (-20.9 percent) were the only models in Audi's 9-vehicle U.S. lineup to post annual sales declines. Audi got a particularly strong boost from 16,379 sales of the A5 coupe in a year when sporty cars and coupes again were shunned by sensibility-driven buyers.

Audi boasted that sales for the diesel-powered TDI variants of the A3 entry-level car and the Q7 midsize crossover also contributed to the record-setting 2010 pace: TDI-powered A3s comprised 53 percent of sales and 43 percent of Q7s sold last year had TDI diesels under the hood.

"For Audi, 2010 was a groundbreaking year," said Audi of America President Johan de Nysschen. "Audi is one of the best-performing franchises in the business today. Consumers respond favorably to superior engineering, efficient performance, and differentiated styling -and that's what they see in Audi."


Mitsubishi: First Increase Since 2007

Mitsubishi sold 55,683 vehicles in 2010, up 3 percent from 2009.  Albeit it a small, below-industry- average increase, it still was Mitsubishi's first year-over-year sales increase since 2007.

And it was Mitsubishi's SUVs that put it in positive territory. The Japanese automaker sold 12,500 Outlander models in 2010 for a 22-percent increase. Add to that 4,294 Endeavors, which increased 33 percent. Also pitching in were the 2,424 Lancer Sportbacks that saw a 208-percent sales rise.

"Customers are returning to Mitsubishi showrooms in large numbers, and the sales results indicate that they like what they see," said Mitsubishi Motors North America President and CEO Shin Kurihara.

Volvo: Lower Sales

Volvo, purchased from Ford by Chinese automaker Geely in mid-2010, reported sales of 53,948, a decline of 12 percent.

All but two of Volvo's 10 models two registered declines in 2010. The XC60 was the Swedish brand's volume leader with 12,030 sold, an increase of 30 percent. The XC90 was its second best seller, though its sales were down. The SC 70 had a 14-percent sales increase to 6,626 vehicles sold.

Suzuki: A Downer

Suzuki sold 23,994 vehicles in 2010, down 38 percent from the 38,689 sold in 2009.

The SX4 was Suzuki's top seller, with 11,606 sold, but that was off 44 percent from 2009. The Kizashi, launched in 2010, picked up some of the pace, with sales of 6,138 units. Grand Vitara sales were down 41 percent to 4,478 sold; Equator sales were off 35 percent at 1,447.

Saab: A Transition Year

Swedish automaker Saab was a company in transition in 2010. The sale by General Motors to Dutch sports car maker Spyker was completed during the year, and its factories, mothballed while the marque was on the auction block, were re-started.

In the United States, one of its most important markets, Saab sold 5,446 vehicles. In 2009, the then GM-owned Saab sold 8,680 vehicles. 2010 sales broken out by model were: 4,533 units of the 9-3; 811 units of the 9-5 and 102 units of the defunct 9-7X.

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.

Photos by manufacturers

1 - Chevrolet Equinox

2 - Ford F-150

3 - Toyota Sienna

4 - Honda Odyssey

5 - Jeep Grand Cherokee

6 - Nissan Armada

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