U.S. Carmakers Accelerating Out of the Recession

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Jeff Kowalsky / Bloomberg via Getty Images

A Ford Motor Co. 2012 Focus vehicle stands in the inspection area at the company's Michigan Assembly Plant in Wayne, Michigan, U.S.

The U.S. auto industry is revving its engine heading into the new year. The three largest domestic carmakers posted strong gains to close out 2011 in another sign that the U.S. economy is coming back to life following the Great Recession. Chrysler led the pack, reporting a 26% jump in sales highlighted by its best December in three years. General Motors posted a 13% increase in revenue, while sales at Ford increased 11% for the year.

The strengthening performance by the Big Three represents a dramatic turnaround for the industry, which was hit particularly hard by the recession. Both GM and Chrysler were forced into bankruptcy and required billions in government bailouts. Ford avoided bankruptcy but took a multi-billion-dollar loan from the government to help it stay afloat. Increased sales is good news for the economy because it indicates that consumers and businesses are increasing their spending, a precondition for economic recovery.

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Ford attributed its 2011 performance to growth in its small car, utilities and truck sales divisions. Small car sales increased 25% for the year, while the Fusion hybrid model enjoyed a record year with 248,067 vehicles sold. “The year finished on a high note, with industry sales momentum strengthening as the year came to a close,” Ken Czubay, Ford VP for U.S. Marketing, Sales and Service, said in a statement. “We saw Ford sales strengthen as well, posting our best December retail sales month since 2005 and closing the year as America’s best-selling brand.”

Chrysler reported an 83% increase for its flagship brand, while the Jeep, Dodge, and Ram Truck brands saw double-digit percentage sales gains in December. “Chrysler Group finished a year of growth on a strong note with our December retail sales soaring 45 percent to our highest dealer retail sales in four years,” Reid Bigland, president and CEO of the Dodge brand and head of U.S. sales, said in a statement.

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GM said December sales increased 5% compared to last year, while the year’s sales were up 14% to more than 2.5 million vehicles. “GM’s balanced portfolio of fuel-efficient cars, trucks and crossovers helped us make the most of the U.S. economy’s slow but steady recovery in 2011,” Don Johnson, vice president of U.S. sales operations, said in a statement.