US Auto Industry has best year since 2007

US_Auto_Industry_2012U.S. auto sales rose 9 percent in December, led by foreign manufacturers, capping off the best year for the industry since before the recession.

2012 sales were driven by a slowly recovering economy, more available credit and the need for consumers and businesses to replace aging cars and trucks along with the mad rush to replace destroyed cars after Hurricane Sandy on the east coast.

In 2012, Americans also had plenty of incentives to buy new cars and trucks. 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. Banks made that easier by offering low interest rates and greater access to loans, even for those with lousy credit.

Toyota, which has recovered from an earthquake and tsunami in Japan that crimped its factories two years ago, said today that sales jumped 27 percent for 2012. Its December sales were up 9 percent. Unlike 2011, the company had plenty of new models stocked in showrooms for most of last year.

Volkswagen led all major automakers with sales up a staggering 35 percent, led by the redesigned Passat midsize sedan. VW sold more than five times as many Passats last year as it did in 2011.

Industry insiders say sales could easily hit a bump in 2013. Auto executives say they need to see a continued downward trend in unemployment and a stronger resurgence in the housing market. According to Jeff Bennett and David Pearson at the The Wall Street Journal, higher home values and growth in new home construction are essential elements to maintaining strong demand and ignite pickup truck sales that have sputtered as contractors and small business owners wait to replace worn out vehicles.