U.S. auto sales up in 2010

U.S. auto sales sputtered back to life in 2010 and car companies expect them to keep climbing this year as the economy recovers and buyers grow more confident.

With sales of about 11.5 million new cars and trucks, 2010 was still the second-worst year in almost three decades, after 2009. And car companies are starting to wonder if they will ever reach the heights they saw in the early 2000s, when credit was cheap, incentives were rampant and sales topped 17 million.

Still, 2010 was a good year for Detroit’s car companies. Ford Motor Co. sales rose 15 percent and it grabbed market share from rivals for the second year in a row. General Motors Co.’s sales rose 6.3 percent, while Chrysler climbed 17 percent, an impressive rebound from 2009 when the two companies restructured in bankruptcy court.

Ford gained a certain amount of respect from the American public because it did not take bailout money from the federal government, said Clarence Harris, sales manager for Friendly Ford in Las Vegas.

“We’re seeing people on the lot that would never have looked at Ford,” Harris said. “We got Lexus and BMW buyers coming in who said, ‘The reason I’m here is we really appreciate the fact your car company did not take the federal bailout.’ ”

Gone are the “glory days” when Friendly Ford was selling 600 to 700 new vehicles a month, the sales manager said. Sales are down to 200 to 250 a month now.

Toyota Motor Corp. continued to struggle. Its sales were flat in 2010, a casualty of the company’s tarnished safety record. Toyota has recalled more than 10 million vehicles since late 2009 for various issues, including sticky gas pedals.

GM expects sales in the 13 million range in 2011, which would be back up to the level the U.S. saw in 2008. Eventually, sales will creep back up to 15 or 16 million, but not much higher, said Don Johnson, vice president of GM U.S. sales.

Car companies have downsized and they’re producing fewer vehicles, so they don’t have to resort to costly incentives to clear out inventory. Big incentives — like the employee pricing for everyone program in the summer of 2005 — were one reason buyers flocked to dealerships.

Also, buyers have been spooked by falling home prices and stubbornly high unemployment. But the economy is improving, and car companies are more confident about 2011.

GM sold 2.2 million vehicles in 2010, nearly 131,000 more than the prior year, even though it got rid of four brands to focus on Chevrolet, Buick, Cadillac and GMC.

The company’s December sales rose 7.5 percent because of hot sellers such as the Chevrolet Equinox, a smaller SUV that seats five people. Equinox sales rose 80 percent.

“Car sales are good,” said Justin Findlay, general manager of Findlay Chevrolet in Las Vegas. “Last month was very good. I feel good momentum at the end of the year and I expect things to get better going into 2011.”

The local Chevrolet dealership sold 180 cars in December, a significant increase over December 2009, Findlay said. A lot of people put off buying a car and are now feeling more comfortable about the economy, he said.

Financing has become much easier as consumer credit scores improved and banks became more accustomed to lending to people with foreclosures and short sales on their record, Findlay said.

Ford’s sales rose thanks to strong demand for its pickups, as construction companies and other small businesses began buying trucks again. The F-150 pickup was the best-selling vehicle in the United States last year.

“People still have money to spend on automobiles, but they hear gloom and doom on the news,” Friendly Ford’s Harris said. “Ford is slowly but surely increasing business in every sector. One car deal at a time, we’ll pull out of this recession. I’m confident we’ll see sales increase in 2011.”

Ford sold 1.9 million cars and trucks and stole customers from rivals including GM and Toyota. Ford said 2010 was the second year in a row it gained U.S. market share, its first back-to-back increase since 1993. December sales rose 3 percent, though, in part because of a 40 percent reduction in low-profit sales to rental car companies.

Chrysler Group LLC sold 1.1 million vehicles in 2010. Much of the increase early in the year came from sales to rental car companies, but new vehicles fueled growth later. Sales of the new Jeep Grand Cherokee were three times higher in December than they were in the same month a year earlier. December sales for all of Chrysler’s brands rose 16 percent.

Nevada saw a small uptick in new-car sales in 2010, but it was marginal at best and 2011 will probably be similar, said Wayne Frediani, executive director of Nevada Franchise Automobile Dealers Association.

Attendance at the Las Vegas Motor Trend Auto Show in November was quite strong, which suggests pent-up demand, Frediani said. People are driving 10-year-old cars because they’re still concerned about unemployment and housing values, he said.

Nevada has seen its automobile dealerships dwindle from 116 to 99 over the last four years, but that’s happened around the country, Frediani said. He doesn’t expect many more dealers to close.

All auto companies reported December and full-year results Tuesday. Other companies reporting were:

■ Hyundai Motor Co., which said its sales rose 24 percent for the year to 538,000 vehicles, a record for the company.

■ Nissan Motor Co., which reported a 17 percent sales jump for the year to nearly 815,000 cars and trucks.

The Associated Press contributed to this report.

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