U.S. Car Sales Rose 15 Percent in January

Auto makers were on track to report about a 15 percent rise in U.S. new-vehicle sales in January, led by increased purchasing by consumers, a healthy sign for the industry's recovery.

General Motors Co. and Chrysler Group LLC both reported Tuesday their sales of cars and light trucks rose 23 percent in January compared to the same month in 2010, while Ford Motor Co. and Toyota Motor Corp. saw sales gains in the mid-teens, The Wall Street Journal reported.

Daimler AG, meantime, reported U.S. sales of 17,631 Mercedes-Benz and Smart vehicles, up 14 percent from January 2010.

GM estimated that new-vehicle sales industrywide would total about 800,000 cars and light trucks for the month, a roughly 15 percent jump from the depressed total of 698,346 in January 2010, when sales were hurt by the recession.

An exact industry total wasn't available Tuesday afternoon because some car makers still hadn't reported their numbers.

While January marked an improvement for car makers, it ranked as a poor showing by historical standards. Except for January 2009, last month was the weakest January since 1993, according to data provider Autodata Corp.

"Generally, it was a very tough month," said Mickey Anderson, who runs Performance Automotive Group in Omaha, Neb., which sells Toyota, Honda, Ford, VW, Mercedes-Benz and Chrysler vehicles. "We did see year-over-year improvement with our domestic lines, but that was off of a terrible month last year. But we saw a huge drop-off from December. I think a fair amount of that had to do with [bad] weather."

The bright spot was higher "retail" sales of cars and trucks to individual customers at dealerships, as opposed to sales to corporate and car-rental fleets. Retail sales typically are more profitable than fleet sales and considered a truer gauge of a car maker's performance in the market.

GM reported it sold 178,896 vehicles in January, up from 146,825 a year ago. It said 77 percent of these vehicles went to consumers, and that its total of retail sales—139,129 vehicles—rose 36 percent from a year ago. GM's fleet sales were down 7 percent compared with a year ago.

Ford sold 127,317 cars and trucks, up 13 percent from a year ago. It said its retail sales were up 27 percent. Sales at Toyota—which has battled image problems from its recall crisis—rose 17 percent, to 115,856, but its Lexus division suffered a 17 percent drop.

Chrysler sold 70,118 cars and trucks. It is one of the few auto makers that doesn't release retail-sales data.

Don Johnson, GM's vice president for U.S. sales, said in a conference call that GM's increase in retail sales reflects "more pull" from customers at dealerships. "The consumer is driving much of the [sales] gains in the industry," he said.

Still, GM was helped by offering higher buyer incentives last month. Car shopping site Edmunds.com said GM incentives rose by an average of $507 per vehicle to $3,762—the industry's highest.

Mr. Johnson acknowledged a "modest" increase in incentives but declined to disclose GM's figures as the auto maker has done in the past.

"We're going to continue to be very judicious with incentives," Mr. Johnson said. "We've spent the last year getting disciplined around inventory and incentive management and we think we've got that under control."

Industrywide, the sales rate on a seasonally adjusted basis dipped slightly from December to about 12.6 million vehicles, according to GM's estimate. During the industry's boom time before the recession annual U.S. sales often topped 16 million.

Joblessness among consumers continues to weigh heavily on the industry, said GM's Mr. Johnson.

Among the four GM brands, Buick and GMC reported sales jumped 32 percent and 30 percent, respectively. Sales of the higher-volume Chevrolet climbed 19 percent, and surged 49 percent at Cadillac.

Total sales of GM passenger cars climbed 15 percent, led by higher demand for the Chevrolet Cruze, Buick Regal and Cadillac CTS Coupe. Sales of crossover vehicles—SUVs built on car underpinnings—increased 31 percent, while full-size pickup truck sales rose 28 percent.

Ford's sales were boosted by a 30 percent jump in F-Series pickup trucks, and a 73 percent rise in sales of its recently redesigned Explorer SUV. The one troubled spot for Ford was its Lincoln brand, whose sales fell 21 percent in January.

"We are on a journey," Ford sales analyst George Pipas said about how the comany intends to rebuild the Lincoln brand, which is due to get seven new or revamped models over the next four years. "This is not going to happen overnight."

Meantime, Nissan Motor Co. said its U.S. sales rose 15 percent in January to 71,847 vehicles, while Honda Motor Co. said its U.S. sales climbed 13 percent as surging demand for its trucks offset lower car sales.

January had 24 selling days, the same as last year.