Car shoppers crowded showrooms in November, lured by an end-of-the-month advertising blitz and what automakers said was a pickup in consumer confidence.
Ford, GM, Honda and Nissan posted sales gains of 21% or more compared with a year earlier, signs that the economy was once again stirring, according to automotive executives.
"The consumer is crawling back," Brian Johnson, an auto industry analyst at Barclays Capital, said in a report to investors.
And that's good news for the automakers, which are also starting to hire again. Just this week General Motors Co. and Chrysler Group announced they were each looking to hire about 1,000 engineers and other technical personnel. The automakers closed factories and slashed tens of thousands of jobs amid the downturn last year.
"We're seeing some stability and consistency in the marketplace for the first time since the economic downturn," said Jessica Caldwell, an Edmunds.com analyst.
Automakers say they are seeing growing demand from people who put off purchasing a new vehicle for economic reasons and because their cars were lasting longer. These people are moving back into the market, automakers said.
The industry was also helped by a flurry of holiday advertising over the last week, Caldwell said.
"If you watched TV over the holiday weekend, you saw a lot of deal messages," she said.
Reflecting those deals, incentives rose slightly in November.
Auto price information company TrueCar.com estimated that the average car incentive was $2,712 in November, up $12 (0.4%) from a year earlier and up $162 (6.4%) from October 2010.
"Even though incentives appear to be slightly higher this year, automakers are becoming smarter by focusing on low APR and special lease programs — strategies with relatively low costs due to near-zero interest rates and much improved residual values," said Jesse Toprak, an analyst at TrueCar.com.
Increasingly, "buyers now have the means to replace older vehicles and credit is becoming a bit more available," said Ellen Hughes-Cromwick, Ford Motor Co.'s chief economist, who also noted that jobs and confidence "are inching back."
One sign was what Hughes-Cromwick called a "quite perky" start to the Christmas retail season last week. The economist said she expected a positive jobs report from the federal government when it releases employment figures Friday.
GM executives also said they have seen several positive signs that the industry will continue its steady recovery.
"Used-vehicle prices are at a new high and, as in past recoveries, that has always preceded an expansion in new-car sales," said Jim Bunnell, a general manager in GM's U.S. sales operations.
"We are starting to see more 'want' buyers appear in the market than 'need' buyers," said Bob Carter, the Toyota brand's U.S. sales chief.
Carter said he was pleased to see that the retail segment of the auto market —sales excluding business done with car rental companies and fleet customers — to top an annual rate of 10 million for the second consecutive month. He said showroom traffic in the closing days of November was the best in several years.
Including fleet sales, the industry sold 12.3 million vehicles last month, up 16.9% from a year earlier.
Autodata Corp. said GM's November sales rose 21% from a year earlier, to 168,635 vehicles, after factoring out the Pontiac, Hummer, Saturn and Saab brands it closed or sold as part of its bankruptcy reorganization last year.
In November 2009, GM sold almost 12,000 of its discontinued vehicles. November and December are the last months when the company had a high sales volume of the scuttled brands. Including those brands, GM sales were still up 12% over a year earlier, according to Autodata.
Ford Motor Co. sales rose 24% in November to 146,956 after factoring out Volvo, which Ford sold earlier this year.
Chrysler Group sales rose 17% to 74,152 vehicles. American Honda Motor Co. said its sales rose 21% to 89,617. Nissan North America Inc. said its sales rose 27% to 71,366 vehicles.
The only major automaker to post a decline was Toyota Motor Corp., which has suffered a series of embarrassing recalls over the last year for problems with sticky gas pedals, brakes and electronics. Toyota said November sales fell 3% to 129,317 vehicles, and the company has seen its market share fall this year.
Carter said that Toyota — which sells a greater percentage of passenger cars than most other major manufacturers — has been hurt by the damage to its brand image, a shift in the market in recent months toward trucks and sport-utility vehicles and a decline in its fleet sales. Retail sales for its combined Toyota, Lexus and Scion brands were up about 4% to 123,200.
"Toyota continues to struggle, being the only major manufacturer to report a year-over-year decline," Caldwell said. "Without new product to compete with and stripped of its bulletproof quality reputation, Toyota is forced to sell on the deal. This lack of profitability is a growing concern for dealers."