DALLAS -- Not even January's deep chill could slow the surging auto industry.
In what is typically a frigid, unfriendly month for automakers, retail sales of new cars and trucks in the U.S. grew an impressive 25 percent -- including a 33 percent jump for General Motors Co. and a 58 percent increase by Chrysler Group LLC.
"If we can have this kind of business in January, I can hardly wait for March," said Ray Huffines, CEO of Plano, Texas-based Huffines Auto Dealerships, which includes Chevrolet, Dodge, Chrysler, Jeep, Hyundai, Kia and Subaru stores.
The increase last month follows 11 percent growth in December, which analysts say bodes well for sales the remainder of the year.
In previous recessions, automobile sales generally tracked housing activity, with the two rising and falling together. But now autos are leaving housing in the dust.
"Housing is down and showing no signs of coming back," said George Hoffer, a business professor at the University of Richmond who follows the industry.
"In reality, the auto industry in recent years has moved to its own drumbeat."
With the growth in January, some automakers and analysts are pushing up their earlier estimates that new-vehicle sales will rise 8.5 percent this year.
Several sources now expect total U.S. sales to top 13 million. IHS Automotive, for example, boosted its forecast from 12.8 million to 13.1 million, and Ford and GM each predict 13.3 million in industry sales, up 500,000.
"Dealers, like most businesses, are looking for consistency in the economy," said Lee Chapman, president of the Dallas-Fort Worth Metropolitan New Car Dealers Association. "Each month seems to pick up a little more steam. Six months ago, we could be up one month, down the next."
Many buyers today are replacing old vehicles. The average car or truck in the U.S. is more than 8 years old and has about 100,000 miles on it, according to various studies.
In addition, automakers are offering an array of highly attractive new vehicles -- such as the Ford Explorer, Chevrolet Cruze, Hyundai Elantra and Jeep Grand Cherokee -- just as the economy is stirring again. Through the credit companies they own, most automakers can also finance the purchases.
"When you get an economic recovery with lots of new products, sales go bonkers," Hoffer said. "They feed on each other."
Moreover, the resurgence in sales has benefited domestic manufacturers more than the imports, mostly because the rebuilding domestics have more all-new vehicles in their showrooms.
"I'd like to think we were up 10 percent or so last month," said Rusty Wallis, who owns Rusty Wallis Honda in Dallas and Rusty Wallis Volkswagen in Garland, Texas. "I think a lot of people are still worried about losing their jobs. But I feel more optimistic this year than I did in '09 and '10."
At the Huffines dealerships, new-vehicle sales were up 65 percent in January.
"Everyone's really optimistic," Huffines said. "If you add up all the projections of manufacturers, we'd have a 20 million (vehicle) industry if they were all right. There's no doubt there will be some pretty good deals."
In fact, the growing competition among the biggest players in the auto industry should keep sales relatively high if a price war breaks out.
The possibility of an all-out battle concerns Sam Pack, an influential Ford dealer who owns four stores in the Dallas-Fort Worth area. As manufacturers get more aggressive, offering $199 monthly payments on some vehicles, dealers' already thin margins may get squeezed, he says.
"And I think this will be a year when we see some very aggressive marketing," Pack said.
GM, Toyota and Hyundai have the resources to offer big incentives on their vehicles, he said. GM began a promotion this month that allows most people with GM leases to waive their last three payments if they buy new vehicles.
The Detroit automaker, apparently eager to rebuild its customer base after its bankruptcy 18 months ago, also raised incentives 16 percent in January to an average of $3,663 per vehicle, according to Autodata Corp., the highest among U.S. automakers.
GM denies that it is sliding back into bad practices, but the high incentives have the industry buzzing.
Nonetheless, Randall Reed feels confident enough that he ordered 1,000 additional vehicles for the spring selling season.
"We saw a 20 percent increase in sales in all dealerships last month and more like 40 percent at Dodge," said Reed, who owns eight stores in Texas.
"If oil doesn't do something crazy, I think it just goes up from here."
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