The sizzling North American light-vehicle market was the year's biggest story, according to the 60th annual Automotive News staff poll.
The steady climb in sales, and sales per store, prompted the auto retailers that survived the recession to devise strategies to sell more vehicles without adding staff, marketing costs and other overhead. Rather than constantly train new hires, dealers became more conscious of the value of staff retention. In line with that, Automotive News ran its first listing of the Best Dealerships To Work For.
But it was more than a retail story. Automaker and supplier factories strained to keep pace with rising sales. Automakers increasingly turned to three-shift work schedules. Overseas automakers planned more North American capacity to ride a wave that is expected to continue for several years.
Here's a rundown of the staff's choices for the top 10 stories of 2012.
1. N.A. sales climb steadily
North America was the world's hot-test auto market.
Sales rose for almost all automakers, with the industrywide percentage gain expected to end the year in the low to mid double digits. The growth rate of the auto industry far outpaced that of the overall economy in the United States, with the automotive sector doing its best to pull the rest of the economy out of its doldrums.
Most remarkable, though, is that it was profitable growth -- for almost everyone. Automakers, suppliers, dealers -- as well as the vendors that supply all three -- were in the black, something that hasn't happened in, oh, roughly a quarter century.
A few of the smallest brands missed out on the party, and Japanese automakers' profits were hurt by an unfavorable dollar-yen exchange rate. But compared with Europe's woes and the auto industry's trials in China, North America was the place to be.
2. Japan reboots
For Japanese automakers, 2012 was a year of sales, market share and North American production rebounds from the disastrous earthquake and tsunami of 2011.
But rising sales couldn't completely offset the hit Japanese makers took from the dollar-yen rate, which Honda Motor Co.'s CFO admitted made exports from Japan unprofitable. To cope, Honda, Mazda Motor Corp. and Mitsubishi Motors Corp. revised their North American strategies, seeking to build North American production volumes as a natural hedge: With costs and sales both in dollars, the dollar-yen rate became less threatening.
Even as Japanese companies planned factories in North America -- often in Mexico -- to cut yen production costs, they set out to trim yen costs for engineering. Toyota Motor Corp. and Honda gave much more authority to their North American operations to engineer and develop vehicles for this market.
Krafcik: Flawed results
3. Hyundai, Kia get busted
Forty mpg. That was the number, printed on new cars' stickers across Hyundai and Kia dealerships and touted in ads.
Not only did Hyundai and Kia offer six nameplates that got 40 mpg in highway driving, but those were the fuel economy numbers for those nameplates' primary versions. Other brands might offer a single, high-mileage version of a nameplate, and put that version's EPA rating in the ads with an asterisk, directing readers to a small-print disclaimer admitting that not all versions got those mpg numbers. But Hyundai Motor America CEO John Krafcik proclaimed his was the "no asterisks" brand.
Except that it wasn't. On Nov. 2, Hyundai and Kia admitted that flawed test results had inflated their fuel economy numbers by as much as 6 mpg. The brands said they had overstated the estimated fuel economy on more than 900,000 U.S. vehicles sold in the 2011-13 model years and would compensate owners for the faulty claims. In fact, no Hyundai or Kia vehicle got 40 mpg.
4. Election spotlight
The auto industry was front and center in the 2012 U.S. presidential election to a degree never seen before.
Democrat incumbent President Obama and Republican challenger Mitt Romney jousted repeatedly over the 2009 bailouts of General Motors and Chrysler: Were they necessary, could they have been done differently and was the payoff worth the price?
Romney, seeking to gain ground in states with a large automotive presence, also played up his roots in Michigan, where his father had once headed American Motors. It didn't work. Obama won Michigan, Ohio, several other states with large auto factory counts, and the election at large.
5. Digital revolution
Online sales and marketing have been around for more than a decade, but in 2012 they took off big time. Dealers' use of both, plus sophisticated computerized tools to manage inventory, soared. Put it this way: Do you know of a dealer without a Web site? And how many still spend more on newspapers, radio and TV than on digital marketing?
Faced with marketing methods that existing laws hadn't anticipated, regulators generally struggled to keep up, but still forced TrueCar to revise its business model. Dealers grappled with the advantages and headaches of relying on Google and social media to connect with consumers.
And the common theme among hot marketing executives such as Ford's Jim Farley and Subaru's Dean Evans was how comfortable they are with digital marketing and social media.
Fiat 500 helps lift Chrysler sales
6. Chrysler's comeback
This was a before-and-after contrast worthy of a Charles Atlas bodybuilder ad. In 2009, several of Obama's advisers wanted to let Chrysler evaporate, thereby freeing up market share that GM might claim as it clawed its way out of Chapter 11. After all, Chrysler's product pipeline was nearly empty and the smallest of the Detroit 3 had toyed with bankruptcy several times before.
But Chrysler got a bailout and a new boss in Sergio Marchionne. In 2012, Chrysler built a string of 30-some months of higher sales, the result of well-executed new vehicles and bold, edgy advertising. It posted solid profits, becoming the black-ink side of the Fiat-Chrysler combo.
Nobody's kicking sand in Chrysler's face now.
7. Facilities disputes
Automakers laid out detailed -- many dealers would say picayune -- specifics on how their brands' dealerships should look after extensive renovations, arguing that some stores looked like they were straight from the 1960s. But some dealers who had redone their stores within the past five years found that they no longer complied with the factory's mandates on, say, the showroom floor's shade of gray tile. And when factory reps chastised dealers for stocking toilet paper that wasn't quite what the rules called for, dealers fumed.
A long-awaited report by an independent consultant to the National Automobile Dealers Association did little to quell the dispute. With substantial monetary incentives tied to complying with factory edicts, the controversy is unlikely to go away soon.
8. Overseas angst
Europe struggled through its worst sales year in decades. GM, Ford, PSA Peugeot Citroen and other carmakers scrambled to restructure and cut costs, even as governments in France, Germany, Poland and Italy harangued against plant closures within their borders.
Meanwhile, sales in China stumbled, leading to a price war at dealerships that quickly spilled down from luxury makes such as BMW to mass-market brands. But even at a slower sales pace, China remained the world's largest auto market -- and a profit haven for GM and Volkswagen AG.
9. EVs fizzle
After a half-decade of green hype, more electric vehicles arrived in showrooms with a whimper. Sales fell far short of targets and battery makers went belly-up. But more EVs are on the way and automakers are relying on various forms of electrification to meet new corporate average fuel economy rules, so the final chapter in this story has yet to be written.
10. Shrugging off prices at the pump
The industry took rising gasoline prices in stride. This was the dog that didn't bark. With plenty of fuel-efficient models in their lineups, automakers didn't blink when pump prices spiked in April and in September, and showroom sales didn't suffer.