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Most automakers report boom in December sales

Ford and Subaru report 33% gains in U.S. sales over a year earlier, and Hyundai soars 40%. But GM and Chrysler suffer declines. Heavy advertising and promotions are credited for increases.

January 06, 2010|By Jerry Hirsch

Whether December 2009 marks the industry's turnaround or was simply a good month in a bad year remains to be seen. Some believe that growing environmental awareness and a greater sense of frugality among U.S. consumers will continue to be a drag on auto sales.

Lester Brown, president of Earth Policy Institute, noted that the scrappage rate for old vehicles is creeping up, which he said was a reflection of declining interest in cars -- particularly among younger people in big cities.

"America's century-old love affair with the automobile may be coming to an end," he said.

Industry analysts counter that an improving economy and an aging fleet of cars will combine to bolster sales this year. The median age of a car rose to 9.4 years in 2008 from 8.3 in 2000, according to auto research firm R.L. Polk & Co.

On top of that, with discounts and incentives, the price gap between new cars and late-model used cars has been narrowing.

"These kinds of price increases in the used market could cause some consumers to purchase a new car instead of used," said Ivan Drury, an analyst.

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