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U.S. auto sales grew in December; Ford surged while Chrysler, GM slipped

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Washington Post Staff Writer
Wednesday, January 6, 2010

The U.S. auto market continued its slow crawl out of the recession in December as more consumers bought cars, but shoppers' enthusiasm remained well below pre-crisis days.

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In December, the annualized rate of auto sales in the United States climbed to 11.2 million, according to Edmunds.com. That's up from 9.1 million at the nadir earlier last year but far from the halcyon days when auto sales ran over 16 million annually.

"The recession shook the foundations of consumer confidence," said Ken Czubay, Ford's vice president of U.S. sales and marketing.

"Everything is improving, but the recovery is really slow," said Jessica Caldwell, senior analyst at Edmunds.com. "It's not even growth, really -- it's more like stabilization." While nearly every major automaker is struggling in the United States, General Motors and Chrysler, the two U.S. automakers bailed out with billions of dollars in government funds, remain particularly troubled.

Chrysler's December sales fell to 86,523, down 4 percent from December 2008, according to Autodata. Sales were down 36 percent for the full year.

General Motors, which is now largely owned by the U.S. government, saw sales drop to 207,538 in December, a 6 percent decrease. Its sales were down 30 percent in 2009, compared with 2008.

Susan Docherty, GM's vice president of U.S. sales, attributed the sales drop to a reduction in fleet sales, a drop in spending for consumer incentives, and the decision to close the Pontiac and Saturn brands.

One bright spot for the U.S. industry was Ford, which experienced a drop in annual sales but outperformed December 2008's sales by 33 percent last month.

The economy's recessionary plunge put the auto industry under intense pressure in 2009, one of the most transformative years ever for the industry.

After the bailouts of GM and Chrysler, the government initiated a $3 billion "cash for clunkers" program to revive sales with government-backed rebates; eventually, 700,000 cars were traded in under the program.

As the U.S. market collapsed, meanwhile, China's surged, and it has begun to rival the United States as the largest auto market.

Many in the industry see the wreckage as pure catastrophe. But some environmentalists think the drop in the market reflects not just economic forces but changing consumer tastes.

Lester Brown, founder and president of the Earth Policy Institute, projects that there were more cars scrapped last year in the United States than sold.

"America's century-old love affair with the automobile may be coming to an end," he said.

"That's pretty preposterous," said John DeCicco, a University of Michigan lecturer and former senior fellow at the Environmental Defense Fund. "We're far from that."

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