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Ford says October sales in U.S. rose 3%

Recovering from September's 'cash for clunkers' hangover, the auto industry is showing signs of a true recovery, analysts say. Mercedes also reports gains.

November 04, 2009|Martin Zimmerman

After two years of sputtering, U.S. auto sales are finally gaining some traction.

Sales of cars, pickup trucks and sport utility vehicles were virtually unchanged in the United States last month compared with October 2008 -- a victory for an industry that has suffered through two years of devastating losses. Not counting August's 1% gain, when sales were goosed by the government's "cash for clunkers" program, it was the only month since October 2007 that auto sales weren't solidly in the red.

Automakers sold 838,052 vehicles in the U.S. last month compared with 838,156 a year earlier, according to results released Tuesday by the automakers and compiled by research firm Autodata Corp.

Sales rebounded smartly from the sharp drop suffered in September after "cash for clunkers" ended. Calculated on an annualized basis, October sales ran at a 10.46-million-unit clip. That's below historic levels, but it's a vast improvement over September's 9.22-million annualized rate.

"We're seeing the industry get some legs under it," said Mike DiGiovanni, General Motors Co.'s top sales analyst.

Not that the auto executives were driving victory laps. They cautioned that high unemployment and the dampening effect it is having on consumer confidence would continue to weigh on auto sales through the end of the year and into 2010.

"Consumer confidence remains very tentative," said Bob Carter, general manager of Toyota Motor Corp.'s U.S. sales division. "We expect the recovery to be very gradual, extending into next year and beyond."

Auto executives and analysts were hopeful that other positive economic signs, such as improvements in industrial production and indications that the housing market may be bottoming, will continue to lure buyers back into showrooms.

"We're definitely stabilizing and showing growth in a positive direction, so hopefully 2010 will be a little bit better," said Jessica Caldwell, senior industry analyst at online auto site She noted, however, that auto sales are a long way from their pre-crisis levels. As recently as 2007, more than 16 million cars and light trucks were sold in the United States.

Buyers, meanwhile, flocked to large sport utility vehicles and crossover utility vehicles, which notched year-over-year sales gains of 40% and 19%, respectively, last month.

GM, the No. 1 player in the U.S. with a 21% market share in October, and Japanese automaker Nissan both posted October sales gains of 5.6% -- tops among the Big Six car companies. GM sales were juiced by incentives -- an average of $4,277 per vehicle, according to, up from $3,668 a year earlier.

But GM also got a boost from strong demand for some of its redesigned models, including the Chevrolet Equinox and the Buick LaCrosse.

At Ford, the No. 2 U.S. car company, October sales were up about 3% from October 2008, driven in part by consumer interest in its Ford Taurus sedan.

Toyota's sales were up a fraction. The Japanese automaker said at the end of September that it would recall 3.8 million vehicles sold in the United States as it tries to resolve concerns that floor mats in those cars and trucks could cause their gas pedals to become stuck, leading to uncontrollable acceleration. Toyota executives said the recall initially brought a lot of Toyota owners into dealerships, but "it's really died down."

Chrysler Group, which also owns the Dodge and Jeep brands, showed improvement, though its sales still fell compared with a year earlier. The No. 3 U.S. automaker said its October sales were down 30% compared with a year earlier. That was by far the worst decline among the Big Six, but it was better than the 42% year-over-year drop in sales Chrysler recorded in September.

Chrysler is scheduled today to release the rescue plan devised by its new management team from Italian automaker Fiat.

Korean automaker Hyundai continued to make a bid to elbow its way into the upper ranks of the U.S. auto market. Hyundai's sales jumped 49% in October, and its market share that month increased to 3.7%. Its surge "puts even more pressure on the domestic manufacturers,"'s Caldwell said. "Every product launch they come out with has got to be a hit."


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