The U.S. auto industry limped to its best year since the boom times before 2008 as results came up short in December as a late Thanksgiving holiday robbed sales from the year's final month.
The tough sledding in December does not suggest a difficult 2014, however, as several executives and analysts expect auto industry growth to continue outpacing the overall U.S. economy as it has since the recession.
In addition to the late U.S. Thanksgiving holiday weekend, December sales were hurt by snow and ice storms that kept consumers away from dealerships, automakers and analysts said.
Editor’s Note: New Video Exposes a ‘Great Retirement Heist’
"Sales were pulled into November, but also people were more impacted by the compressed shopping season, most of which was in December," Kelley Blue Book senior analyst Karl Brauer said. "People were doing more Christmas shopping than car shopping."
He added that industry-watchers should not be overly concerned by a December that was affected by the timing of a holiday in the previous month. Last month included January 2 due to a quirk in the calendar that affected how automakers typically report monthly sales.
Monthly auto sales are seen as an early indicator of consumer spending.
U.S. industry sales in 2013 finished at 15.6 million vehicles, up 7.6 percent from 2012, while December results inched up 0.3 percent. The annualized sales rate in the final month was 15.4 million vehicles, well below the 16 million expected by economists surveyed by Thomson Reuters.
The timing of Thanksgiving weekend had a greater impact on December sales than in recent years, causing automakers to miss expectations, said Mustafa Mohatarem, General Motors Co's chief economist.
The late December holiday season is generally one of the heaviest sales periods at U.S. auto dealerships. GM, Ford Motor Co. and Volkswagen AG all said the weather was less of a negative factor than the timing of the Thanksgiving holiday.
December sales were counted through Thursday, when much of the U.S. Midwest was buried in snow. The storm is now over the U.S. Northeast, but January sales will have time to recover from the current storm as the bulk of sales typically occurs later in the month, said Kurt McNeil, GM vice president of U.S. sales operations.
GM shares ended 3.4 percent lower at $39.57 while Ford shares rose 0.5 percent to close at $15.51 on the New York Stock Exchange on Friday.
BEST YEAR SINCE 2007
For all of 2013, industry sales were 50 percent higher than 2009 when they slumped to 10.4 million vehicles during the height of the recession. It was the best full-year performance since 2007, when sales hit 16.1 million vehicles.
While some economists and analysts expect 2014 sales to rise to between 16 million and 16.5 million vehicles, there is growing concern that competition will intensify, leading to higher incentives and lower profit for companies.
Research firm TrueCar.com said vehicle transaction prices fell by an average of $200 per vehicle in December, or 0.6 percent, over last year, while incentives were up $103 per vehicle, or 4 percent.
The gradually improving economy, including stronger job and housing markets, will drive future growth, as opposed to consumers' need to replace aging vehicles, which the industry has described as pent-up demand, said Bill Fay, U.S. head of the Toyota brand. He also cited auto loan interest rates, near historic lows, as a positive.
Ford boasted the biggest gain in U.S. market share for the year, adding four-tenths of a point to finish at 15.9 percent. Subaru also showed the same rate of increase to 2.7 percent.
Chrysler increased its share by two-tenths of a point to 11.3 percent, while GM was flat at 17.9 percent. The biggest losers were Kia and its parent Hyundai Motor Co., which lost four-tenths and three-tenths of a point, respectively, to 3.4 percent and 4.6 percent.
GM's December sales fell 6 percent, to 230,157 new vehicles, below analysts' expectations of a slight sales gain.
Sales of GM's Chevrolet Silverado full-size pickup truck fell 16 percent in the month as analysts said the automaker did not load incentives onto the redesigned vehicle to match what rival Ford was doing with its market-leading but older F-Series.
Ford's sales rose 2 percent to 218,058 vehicles, missing expectations. Its F-Series pickup truck, which finished as the best-selling vehicle in the U.S. market for the 32nd straight year, had an 8 percent sales gain.
Toyota's Camry finished as the top-selling passenger car for the 12th consecutive year.
GM introduced new versions of its Chevrolet Silverado and GMC Sierra pickup trucks last year while Ford will launch a redesign of its trucks later this year.
Toyota Motor Corp.'s U.S. December sales fell 1.7 percent to 190,843 vehicles, versus expectations of a slight gain.
Chrysler reported a 6 percent gain last month in its U.S. auto sales to 161,007 vehicles. That was the automaker's best December since 2007, but still narrowly missed analyst expectations. Ram pickup truck sales rose 17 percent.
Jeep sales rose 34 percent in the month, led by the new Cherokee, which sold four times as well in December as the vehicle it replaced, the Jeep Liberty, did a year earlier.
Honda Motor Co sales rose 2 percent to 135,255 vehicles, which also missed analysts' expectations.
Nissan Motor Co. sales rose 10.5 percent in December, allowing the Japanese automaker to finish with its best year for U.S. sales ever. Hyundai and Kia saw their combined sales also miss analysts' expectations.
Daimler AG's Mercedes-Benz won bragging rights as the top-selling luxury brand, edging BMW by a count of 312,534 vehicles to 309,280 vehicles.
Chrysler is majority-owned by Italy's Fiat SpA. Earlier this week, the two companies announced that Fiat would buy the remainder of Chrysler that is currently owned by a United Auto Workers healthcare trust, for $4.35 billion. That deal is expected to close by January 20.
Editor’s Note: New Video Exposes a ‘Great Retirement Heist’
© 2016 Thomson/Reuters. All rights reserved.