Economy, year-end sales help car market

By Tom Krisher and Dee-Ann Durbin

Associated Press

Published: Thursday, Jan. 3 2013 8:52 p.m. MST

In this Wednesday, Dec. 5, 2012, photo, Honda Pilots are seen outside of a Honda car dealership in Des Plaines, Ill. The U.S. auto industry ended 2012 on a high note, with December sales the strongest they have been since before the recession. Analysts predict an even bigger year in 2013, as a stronger economy, low-interest rates, aging cars on the road and competitive new products continue to draw buyers to dealerships. (AP Photo/Nam Y. Huh)

Associated Press

DETROIT — A steadily improving economy and strong December sales lifted the American auto industry to its best performance in five years in 2012, especially for Volkswagen and Japanese-brand vehicles, and experts say the next year should be even better.

Carmakers on Thursday announced their final figures, which totaled 14.5 million — 13 percent better than 2011.

More than three years after the federal government's $62 billion auto-industry bailout, Americans had plenty of incentive to buy new cars and trucks in 2012.

Unemployment eased. Home sales and prices rose. And the average age of a car topped 11 years in the U.S., a record that spurred people to trade in old vehicles. Banks made that easier by offering low interest rates and greater access to loans, even for buyers with lousy credit.

"The U.S. light vehicle sales market continues to be a bright spot in the tremulous global environment," said Jeff Schuster, senior vice president of forecasting for LMC Automotive, a Detroit-area industry forecasting firm.

Sales were far better than the bleak days after the U.S. economy tanked and GM and Chrysler sought bankruptcy protection. Back then, sales fell to a 30-year low of 10.4 million, and they are still far short of the recent peak of about 17 million, set in 2005.

The best part of 2012 came at the end, when special deals on pickup trucks and the usual round of sparkling holiday ads helped December sales jump 9 percent to more than 1.3 million, according to Autodata Corp. That translates to an annual rate of 15.4 million, making December the strongest month of the year.

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