Sunday, November 7, 2010

Car sales indicate a strong October

A handful of automakers reported Tuesday that they saw car sales increase in October compared with a year ago, but a final tally on the month's sales won't be complete for another day.
Election Day split the reporting of auto sales, with the larger automakers, including Ford Motor Co., Nissan and General Motors, expected to come out with their numbers today.

Hyundai Motor America, the largest automaker to report Tuesday, said its U.S. sales rose 38 percent last month to 42,656 vehicles from 31,005 a year earlier.

The gain was led by sales of the Sonata, which were more than double those of a year ago. The automaker has introduced turbo and hybrid versions.

Smaller automakers Porsche Cars North America Inc. and Suzuki Auto also booked gains for October.

Optimism grows

Other analysts are talking with optimism about how the month will wrap up.

A Ford analyst predicts the final tally will show sales "broke through the glass ceiling" in October to achieve the highest unaided pace in more than two years.

Industrywide, light-vehicle sales are projected to top a 12 million annual pace for October, said George Pipas, Ford Motor Co.'s sales analyst. That's the highest rate since September 2008, excluding the spike in sales that resulted from the U.S. government's Cash for Clunkers incentive program in August 2009.

"This is certainly a good sign and an indication the fourth quarter will be higher," Pipas said.

Consumers were attracted to dealerships by closeout sales on 2010 models and heavy advertising for "pickup month" by Ford and GM, Pipas said. Ford gained market share last month, he said.

"Since the fourth quarter of 2009, the sales rate has been advancing on a quarter-by-quarter basis," Pipas said. "The economy is growing, albeit at a modest pace. Unemployment and home prices are still very much a drag."

Ford expects U.S. auto sales "may be close to 13 million" in 2011, Pipas said. Last year, automakers sold 10.4 million cars and trucks, the lowest since 1982.

"New-vehicle traffic and selling rates in October are better than we expected," said Earl Hesterberg, CEO of Group 1 Automotive Inc. "There appears to be a very good chance that this will be the best seasonally adjusted selling month of the year."

AutoNation, the largest U.S. auto retailer, said sales are being helped by improved access to credit.

"The prime segment is all the way back. The near-prime segment is performing well," Chief Operating Officer Michael Maroone said. "It's really the subprime segment that's still under pressure."

Bloomberg News contributed to this story.

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