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Demand, Credit Drive Sales

loansStrong pent-up demand and easier access to credit made U.S. auto sales a bright spot in the economy for 2012.

Light vehicle sales in the US grew 13.42 percent, reaching 14.46 million units in 2012, according to Ernst & Young's Global Automotive Center.

As a result of the strong growth in new car sales, used vehicle prices continued to decline during the year. The share of subprime loans remained especially high in the case of used cars.

The growth in sales was accompanied by a change in the segment mix of vehicles. The preference of US customers is shifting toward smaller cars, and as a result, the share of small-sized cars touched a historic high of around one-fifth of new car sales in 2012. The penetration of diesel cars also increased significantly (albeit from a low base) amid rising awareness of diesel as a clean fuel and a slew of new launches in this segment. However, diesel car sales made up less than one percent of 2012 volumes.

Dealer and automaker incentives this year were targeted for specific segments and vehicle models (such as high incentives in the luxury car segment), in a sharp contrast to the "across the board" discounts offered by automakers during 2008 and 2009.