Ford trucksRICK WILKING
Ford Motor Co. posted a 33 per cent sales gain for December as U.S. auto sales ended 2009 on an upswing after a tumultuous year that saw GM and Chrysler collapse into bankruptcy protection and China overtake the United States as the biggest car market.
The Ford sales surge included all categories of its cars and trucks and ran beyond the expectations of analysts and sent the company's stock sharply higher. Ford shares powered above $11 (U.S.) to hit their highest level since August 2005.
The stock has gained 55 per cent in a rally since early November and has more than quadrupled over the past year as investors bet the No. 2 U.S. automaker would steer clear of the federal bailouts that wiped out equity in its domestic rivals.
Ford's U.S. market share rose to 15 per cent for all of 2009, up about a percentage point on the year to mark the first such gain for the automaker since 1995, when it controlled about a quarter of the market.
Other automakers trailed Ford's gain. Sales for Nissan Motor Co. were up 18 per cent in December. Chrysler's sales dropped 4 per cent.
General Motors Co. was expected to post a sales decline near 9 per cent. After adjusting for population, U.S. auto sales suffered their deepest decline since World War Two in 2009. Full-year sales are expected to be above 10.3 million vehicles, down 40 per cent from where the industry began the decade in 2000.
In a historic reversal, vehicle sales in China surged to overtake the U.S. market as the world's largest in 2009.
With a final sales tally due later this week, analysts expect China sales to have soared 44 per cent to 13.5 million units in 2009. Slower growth is projected for this year.
Major auto makers are betting that the U.S. market is poised for a gradual but steady rebound this year and next and have set production plans higher.
Initial sales results pointed to an overall sales rate for December of around 11.5 million units on an annual basis, stronger than expected and the best total since a summer boom driven by the U.S. government's "cash for clunkers" program.
"There is a pitter-patter of data turning positive," said Ford economist Ellen Hughes-Cromwick.
Ms. Hughes-Cromwick said Ford believes the global economy has now swung to recovery, with worldwide vehicle sales expected to bounce as high as 75 million in 2010 from about 64 million vehicles sold last year.
Ford said it expected U.S. sales to hit a range of 11.5 million to 12.5 million vehicles in 2010, including work trucks.
"I think 2010 is going to be a better year," said Al Castignetti, who heads Nissan-brand sales in the U.S. market. "We're starting to see lenders get a little bit more aggressive, and I think consumers are starting to settle down and get a little more comfortable."
U.S. auto dealers and analysts said December sales results were boosted by bargain-hunting shoppers taking advantage of holiday discounts and by two additional sales days in the month compared with a year earlier.
In the most aggressive incentive offers, GM gave its dealers up to $7,000 (U.S.) - a discount of almost 50 per cent in some cases - to buy up remaining inventory of the discontinued Pontiac and Saturn brands still on their lots.
GM expects that move to have effectively cleared out old Pontiac and Saturn inventory, allowing it to start 2010 with a clean focus on its remaining four U.S. brands: Chevrolet, Cadillac, Buick and GMC.
GM sales results are expected to have dropped near 9 per cent on an overall basis, reflecting a sharp contraction in shipments to fleet operators led by car rental agencies.
But GM sales managers are likely to point to success in increasing more profitable retail sales, lowering inventory to near record lows and cutting the overall amount that the automaker spent on incentives.
Industry tracking service Edmunds estimated industry-wide sales incentives for December dropped 11 per cent from a year earlier to an average of just over $2,500 per sale.
Chrysler, now controlled by Fiat SpA, has also been battling to reduce a reliance on aggressive discounts and cut-rate fleet sales that have topped half of its overall sales in recent months.
In a positive sign for that turnaround strategy, Edmunds said it calculated that Chrysler's December incentive spending had dropped 30 per cent and was lower on average than both GM and Ford.
The GM and Chrysler bankruptcies left GM held 60 per cent by the U.S. Treasury and Chrysler under the management control of Fiat CEO Sergio Marchionne.
GM and Chrysler took the brunt of the industry's collapse in 2009, but their stronger rivals were hit as well.
Toyota's U.S. sales had plunged nearly 24 per cent through November and it faces the aftermath of its largest-ever recall to fix accelerator pedals on nearly 4 million vehicles after reports of sudden bursts of acceleration that led to deadly crashes.