Auto sales surge - along with gas prices

Though gas prices have continued their ascent since the beginning of the year, U.S. automakers reported robust sales in February.

The Big Three U.S. automakers – General Motors, Ford and Chrysler – have charged back from the depths of the recession, when both GM and Chrysler required major investments from the federal government in order to avoid insolvency. Though the bailout funds were exceedingly controversial, they helped save jobs and prompted a restructuring that has fueled growth over the past few years.

GM officials have pressed forward with ambitious cost reduction campaigns, as the company has worked to bolster its profitability. Ford and Chrysler, meanwhile, have also strived to implement business cost reduction initiatives that have boosted profits and improved operating efficiency. What's more, though all three carmakers were notorious for their poor supply chain management, they have deftly refocused their efforts in a coordinated move to augment revenue and drive sales.

The strategic sourcing and spend management initiatives are working, as GM, Ford and Chrysler all reported an uptick in sales in February, The New York Times reports automakers are enjoying robust demand from consumers as financing has eased, affording more Americans the opportunity to either own or lease a new vehicle.

In February, analysts estimated the seasonally adjusted selling rate for new vehicles hit approximately 15 million, up precipitously from the 13.4 million cars sold in February 2011. Chrysler executives said the carmaker benefited from the uptick, with the company reporting February sales surged 40 percent compared to the year prior.

Ford officials noted the company sold 14 percent more vehicles in February than it did 2011. GM said sales rose 1 percent, but company executives noted sales in February 2011 were particularly robust because of an aggressive sales discount the automaker offered during the second month of the year.

Outside of the U.S., Toyota and Honda – both based in Japan – said sales climbed 12 percent from the year prior. Nissan, which has witnessed rapid growth over the past few years, said its sales grew 16 percent last month. The strong results underscore how automakers have charged back in the wake of shocks to their supply chains, caused by the 9.0-magnitude earthquake and tsunami that battered manufacturing facilities in Japan in March 2011.

Chrysler's U.S. sales head, Reid Bigland, said the carmaker's success could be attributed to its expanding fleet of fuel-efficient cars.

"Our product portfolio now contains some of the most fuel-efficient vehicles in our company's history," he said. "A few years ago, higher fuel prices were a major threat to our total vehicle sales, whereas today, those higher prices have become far less of an issue."

Even though gas prices are continuing to rise, carmaker executives said they were confident an uptick in the number of hybrid and electric vehicle offerings would help offset any consumer anxiety over the higher prices they are paying at the pump. GM vice president Don Johnsom noted U.S. economic indicators point to a sustained recovery in the world's largest economy, and he said the Detroit-based carmaker is bullish on future sales growth – even with the specter of higher gas prices looming.

"We do not believe that short term fluctuations in pump prices will curtail industry growth in 2012," he asserted. "That's because consumers and the overall economy are in much better shape than they were a year ago."