January continues car sales momentum as great products lure customers

Jan 31, 2012

January was another good month for U.S. car sales. 

Analysts think most car companies will report they sold more cars in January than they did in the same month last year.

Part of the reason is pent-up demand.  Many people held onto their old cars during the recession, and month by month, those aging cars are giving out.  People are also feeling a bit more confident in the economy.

Also, it appears Toyota has for the most part gotten back to full production, after last year's tsunami in Japan.

But there's another factor at play, according to Jesse Toprak of TrueCars.com.

That's great product.

Toprak says there are more high-quality cars and trucks available, regardless of brand, than almost any other time in the auto industry.  And it's bringing people back to showrooms.

He says, of course, some cars are better than others.  But lemons and clunkers don't exist anymore.    Competition is at a fever pitch in the U.S. these days, and bad cars just don't sell.    So nobody is making them.

"The real improvement and amazing amount of work done in the industry, I feel, is getting lost a bit," says Toprak.  "That’s unfair to people who are working so hard to make amazing cars and trucks."

Toprak says the bankruptcies of GM and Chrysler and Toyota’s recall crisis obscured the quality improvements that happened industry-wide over the last few years.

Back to those auto sales - Chrysler, long criticized for its quality problems, will lead the pack in terms of a percentage gain year over year.    New products introduced since last January have buoyed the Detroit automaker's sales.

GM, on the other hand, is likely to see a drop in its January sales.  That's because the company broke out the incentives last January, boosting the numbers that month. 

The company was criticized by analysts and reporters for doing it, but since then, executives say the company's incentive spend has moderated.

 

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