U.S. auto sales are off to a strong start this year, continuing their brisk pace from late 2011.
Chrysler had its best January in four years while Toyota got a boost from its new Camry. Volkswagen, which wants to aggressively expand in the United States, reported much higher sales. One sour note was GM, where sales fell compared to a strong January a year earlier.
Analysts expect industrywide sales rose about 7 percent to more than 870,000 for January, kicking off what is expected to be the strongest year for the industry since the recession. Jesse Toprak, vice president of industry trends for TrueCar.com, said demand is growing as the economy improves.
"For the first time in several years, we are starting the year off with a warm and fuzzy feeling," Toprak said.
For all of 2012, auto sales could reach close to 14 million new vehicles, analysts say, up from 12.8 million in 2011. While that forecast is below the 2000 peak of 17.3 million, it's better than the 10.4 million trough in 2009.
One reason car sales are improving is that buyers need to replace aging vehicles. The average age of a vehicle in America has reached a record 10.8 years. Low interest rates and greater loan availability also spurred demand in January.
Chrysler's January sales jumped 44 percent, led by surge in demand for the Chrysler brand. Buyers flocked to the revamped 200 and 300 sedans. Chrysler sold 7,007 of the 200 midsized sedan last month, more than eight times the number it sold in January 2011. Sales of the Chrysler 300 large sedan almost quadrupled from a year earlier.
Sales at Toyota rose 7.5 percent on strong demand for the new Camry, which went on sale in the fall. Camry sales rose 56 percent in January and the sedan remained America's best-selling car. Sales of the Prius hybrid rose 9 percent.
Ford's sales rose 7 percent. Demand for the Ford Focus compact car rose 60 percent, while sales of the Escape small SUV rose 24 percent.
General Motors' sales fell 6 percent as demand for its trucks and crossovers fell. One problem: GM is no longer making the HHR crossover, which contributed more than 7,300 sales to its bottom line in January 2011. Sales of the Chevrolet Volt electric car nearly doubled to 603. But that was less than half the number sold in December and less than the sales of rival Nissan Leaf. Volt sales were affected by the government hearings into Volt battery fires and GM's announcement in early January that it will retrofit existing Volts so they are less prone to fires after a severe crash.
The industry faces some challenges. Consumer confidence fell in January after two straight months of big gains as Americans worried about incomes, gas prices and business conditions. Unemployment is at its lowest level in nearly three years, but it's still 8.5 percent.
"Overall, the economy's not in a good place yet, but I think consumers are reacting to the conditions much more favorably than expected," said Jeff Schuster, senior vice president of forecasting for LMC Automotive.