US carmakers enjoy best year of sales since 2007

A sluggish December failed to derail the US car industry's best year since 2007, as sales of Ford's Fusion surged to a record, Chrysler Group posted its 45th straight month of sales increases and General Motors' (GM) Cadillac cars soared 48 per cent.

While cold and nasty US weather last month slowed GM's sales gains for the year and left its market share little changed for 2013, Ford boosted its share to 15.9 per cent from 15.5 per cent and Chrysler's increased to 11.5 per cent from 11.4 per cent. The three Detroit-area carmakers came within about one-20th of a percentage point of posting market share gains in the same year for the first time since 1988, according to data compiled by Bloomberg.

Detroit's car companies ended 2013 in a position that would have seemed unfathomable just five years ago, when GM and Chrysler headed toward government-backed bankruptcies and Ford, using money borrowed from mortgaging its Blue Oval, struggled to restructure itself amid the longest recession since the Great Depression.

Getting their financial houses in order and fielding attractive cars has freed the Detroit Three from the longtime bind of choosing between volume or charging enough for their cars to earn profits on them, Bloomberg Industries' Kevin Tynan said.

Each of the carmakers boosted average selling prices of their vehicles in 2013 amid a US car market poised for a fifth consecutive year of expansion in 2014.

Kurt McNeil, GM's vice-president of US sales operation, for example, said his company's average transaction prices "are now the highest in GM's history,"

Sales have been of "much better quality" than before the recession that ended in 2009, said John Casesa, senior managing director at Guggenheim Partners.

The industry used to exceed 16 million sales per year "only by way of very heavy incentives to get people to buy cars," Casesa said. "Today, incentives are much lower, the industry has cut capacity and we're selling 16 million units at very profitable prices. So we've got a much healthier industry."