(Bloomberg) Bayerische Motoren Werke AG (BMW)'s BMW sales surged 39 percent in the U.S. in December to top Daimler AG (DAI)'s Mercedes-Benz in luxury-auto deliveries for the year as U.S. light-vehicle sales reached the highest level since 2007.
With a 72 percent increase in 5 Series deliveries last month, Munich-based BMW boosted its annual total by 14 percent to a record 281,460, edging out Mercedes for a second straight year. Toyota Motor Corp. (7203)'s Lexus, the U.S. luxury champ for 11 years until 2011, was third at 244,166 after a 23 percent jump.
Growing sales by the top luxury brands helped push the industry to a total of 14.5 million deliveries, the most in a half-decade and the first three-year streak of at least 10 percent increases since 1973. Last year's 13 percent increase was the biggest since 1984. Analysts project further growth this year to 15.1 million annual light-vehicle sales, the average of 18 estimates in a Bloomberg survey.
"The U.S. is ready to become the cash cow again," said Rebecca Lindland, analyst with IHS Automotive in Norwalk, Connecticut. "Right now, we are the brightest bulb in the chandelier."
U.S. automakers General Motors Co., Ford Motor Co. (F) and Chrysler Group LLC all beat estimates for December sales while major Asian automakers missed. For the year, GM's share fell to the lowest level since 1924, while Chrysler surprised analysts by gaining more market share than any automaker other than Toyota and Honda Motor Co.
After sales fell to the lowest level in almost three decades, the U.S. auto industry has clawed its way back and flipped the narrative. Now it's leading the U.S. economy out of the economic valley. Far more sober than the industry that once pumped up sales with profitless production, Detroit's new break- even point is a market of about 10 million annual auto sales. So the possibility of more than 15 million sales this year means good times are here again.
GM (GM) and Ford climbed yesterday to their highest closing prices since July 2011. GM slid 1.2 percent to $29.45 at 10:09 a.m. New York time while Dearborn, Michigan-based Ford gained 0.3 percent to $13.50.
With the so-called fiscal cliff of tax increases largely avoided and automatic spending cuts delayed, the economy is in good shape to start 2013, Kurt McNeil, GM vice president of U.S. sales operations, said on a conference call.
"They clearly have a lot of work to do, but the short-term crisis has passed, and that clears the runway for full-year light-vehicle sales to rise to the 15 million to 15.5 million unit range in 2013," he said. "That will make 2013 the industry's best year since before the great recession."
Not 'Boom Times'
The U.S. averaged 16.8 million light-vehicle sales annually from 2000 to 2007, before dropping to 10.4 million in 2009, a 27-year-low, Autodata figures show. The record was 17.4 million in 2000.
"We're not talking about boom times when we're selling 17-17.5 million units," Mustafa Mohatarem, GM's chief economist, said yesterday on a conference call. "It's really encouraging that people are much more confident about jobs; banks and other credit institutions are much more willing to lend. So you're seeing the customer continue to come back into the marketplace. The steadier the pace, the better for us, long term."
Consumers should be buying more vehicles given the age of cars on the road, Lindland said. Yet IHS forecasts U.S. sales peaking at 16.7 million in 2017 and not reaching previous highs.
"We're losing vehicles off the road," Lindland said. "It's programs like Zipcar. It is fundamental changes in the structure of the industry." Zipcar Inc., a car-sharing serivce, agreed this week to be acquired by Avis Budget Group Inc. (CAR) for $491 million.
Honda sales climbed 26 percent, the company said in a statement, missing the 32 percent increase that was the average of eight analysts' estimates. The Tokyo-based company's CR-V reclaimed the top spot among sport-utility vehicles from Ford's Escape, which had a 21 percent decline in December following its fourth recall.
The company's Civic, which drew a withering review from Consumer Reports when it was redesigned in 2011, was the best- selling small car in the U.S. last year, topping Toyota's Corolla for the first time in a decade. A modified Civic went on sale in late November intended to address many of the criticisms raised by Consumer Reports.
Nissan Motor Co. deliveries slipped 1.6 percent, according to an e-mailed statement, falling short of the average estimate for a 2.7 percent gain.
Toyota's December sales rose 9 percent, according to its website, trailing the average of eight analyst estimates for a 10 percent rise. The Toyota City, Japan-based automaker's Camry was the No. 1 car in the U.S. for the 11th year in a row.
For the full year, GM's sales gained 3.7 percent to almost 2.6 million, the automaker said in a statement on its website.
The Detroit-based automaker has 13 new Chevrolet models going on sale this year, including a redesigned Silverado full- size pickup, the company's best-selling vehicle in the U.S.
Ford's light-vehicle sales increased 4.7 percent to 2.24 million as its F-Series full-size pickup line secured a 36th straight year as the nation's most popular truck and 31st consecutive year as the top-selling vehicle in the U.S.
Chrysler Group's Dodge Grand Caravan was the year's top- selling minivan, besting Honda's Odyssey and Toyota's Sienna. Auburn Hills, Michigan-based Chrysler's 2012 sales climbed 21 percent to 1.65 million.
'Being No. 1'
Toyota, poised to regain the global sales lead from GM, said its full-year deliveries rose 27 percent to 2.08 million in the U.S. while Honda's climbed 24 percent to 1.42 million. Those two automakers were the hardest hit by the 2011 earthquake and tsunami that cut production and sales that year.
Nissan, based in Yokohama, Japan, set a company record for U.S. sales with 1.14 million, up 9.5 percent.
While sales titles can be just a matter of bragging rights, they also connote a positive tone that helps attract even more customers.
"Being No. 1 means success," Ludwig Willisch, chief executive officer of BMW of North America, said in an interview. "BMW is obviously a very successful company, and that's attached to the product, so people want to buy a car that is from a successful company."