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U.S. auto sales could top forecasts

David Shepardson
Detroit News Washington Bureau

Chicago — Automakers buoyed by rising consumer confidence, falling unemployment and low gas prices think U.S. auto industry sales could top forecasts.

In January, U.S. auto sales were up almost 14 percent — and sales are strong in the first half of February — despite brutal winter weather in parts of the northeast that has slowed sales in some areas like Boston.

Ford shows off its 2016 GT sports car, introduced earlier this year in Detroit, at the Chicago Auto Show.

At the Chicago auto show Thursday, automakers unveiled new SUVs, pickup trucks and cars — nearly all with pricier features. Low interest rates and long-term repayments and low-cost leases are helping auto sales continue to rise for the seventh straight year — the longest continuous improvement in auto sales in a half-century. But sales — after rising 16.5 million in 2014, up 6 percent, for the best year since 2006. Sales are expected to rise this year more modestly.

GM North American President Alan Batey emphasized that despite strong sales, the average vehicle on the road is still 10 years old — and there is a lot of pent up demand. "January was really really strong. The fuel prices being low is definitely fueling sales," Batey said on the sidelines of the Chicago auto show. "I think it could be a big year. I think it will be a really good year. It could be a banner year. We're ready for it."

But Batey said the key is balancing supply and demand and staying disciplined.

Nissan Motor Co.' s North American chairman Jose Munoz said that the Japanese automaker looks to boost sales to 10 percent market share by 2017 and it is considering new investments. The company has added 9,000 U.S. jobs since 2011 as it ramped up production.

"As we close in on Nissan's goal of 10 percent of the U.S. automotive market, we are carefully considering our next waves of investment," he said.

Nissan sold 1.39 million vehicles in 2014, up 11.1 percent — representing 8.4 percent market share, an all-time record.

Toyota’s new Avalon is unveiled in Chicago. Jack Hollis, group vice president of marketing at Toyota, said sales are strong — in part because younger people are returning to showrooms.

Toyota group vice president and general manager Bill Fay said in an interview that sales were off to a "pretty good start" in February. He says the year could outpace its forecast of 16.7 million vehicles. But he noted that at some point interest rates will rise — a move that could reduce vehicle sales. But he said that the forecast could be a "bit conservative. ... which is a good number for everyone. We can plan to it. I think there's some sensibilities that stay in the market without a kind of runaway number," Fay said. He said Toyota will reassess sales this spring and assess its production plans.

Fay noted that SUVs and pickups were 55 percent of the market in January — a trend he thinks is likely to continue because of low gas prices. "We're working with the manufacturing side to see how we can build as many RAVs and Highlanders. Our growth this year will really be in light trucks," Fay said.

Jack Hollis, group vice president of marketing at Toyota, said sales are strong — in part because younger people are returning to showrooms. "All those buyers we thought weren't wanting to drive cars — that wasn't the fact. The fact is they didn't have a job — (youth) unemployment was at 25 percent. That's why they weren't buying a car," Hollis said.

Al Gardner, president and CEO of FCA US LLC's Chrysler brand, said sales are strong in February for the company in the United States and are on track to mark the 59th straight month of higher year of year sales. Sales were up 14 percent in January. "If the snow hadn't killed the northeast a little bit, it would have been better," Gardner said. "It should be a great year."

FCA US LLC’s Ram brand introduces the 2015 1500 Laramie Limited Thursday in Chicago.

Gardner says he doesn't think the upswing will prompt new plants anytime soon. "We'll max out the production we have — that's it. There's no plans sitting around that says, 'Hey we are going to build bricks and mortar and put new plants in.' It's all about efficiency," Gardner said.

Internally, FCA LLC says the "streak" is a big deal even though it doesn't really impact profitability. Gardner conceded that the company will face challenges keeping the streak intact through the year. "There are certain months that are really hard — and they are pinpointed and circled," Gardner said, saying it is "an internal rallying cry. It's something we're very focused on but at the end of the day we're here to make money. If it ends, it ends."

DShepardson@detroitnews.com