DETROIT (Nov. 5, 2010) — Most auto makers posted solid U.S. sales gains last month, leading the industry to its strongest performance in more than a year in another sign that consumers are growing more confident.
Overall industry demand jumped 13 percent in October from year-earlier levels, and sales on a seasonally adjusted annual basis topped 12 million for the first time this year. Sales through October are now up 11 percent from last year's 27-year lows.
“Consumers who have a job are feeling a little bit better and not fearing every Friday anymore,” said Rebecca Lindland, an analyst at researcher IHS Automotive. They feel like the worst is over and they're starting to trickle back into showrooms.”
Ford Motor Co., helped by strong demand for cars and trucks at the Ford Division, posted a 15 percent increase in October sales. Increases at Chrysler Group L.L.C. , American Honda, Nissan North America and Hyundai-Kia outpaced Ford's. The only major auto maker to tumble was Toyota Motor Corp., down 4 percent.
General Motors Co.'s U.S. sales rose 4 percent last month, beating analysts' expectations of a decline from last October.
The results from the biggest auto makers combined with a strong showing among some smaller auto makers reinforced forecasts that October would mark the industry's strongest month of the year.
Autodata Corp. said the light vehicle SAAR for October 2010 was 12.26 million units—up from 10.43 million units in October 2009.
The U.S. sales rate has topped 11 million since March, according to Autodata. A rate above 12 million would be “a good sign and an indication the fourth quarter will be higher,” George Pipas, Ford's sales analyst, said in a Nov. 1 interview.
New models draw shoppers
At the Ford Division, car demand rose 23 percent, fueled by sales of the Fusion and Focus. Sales of the F-Series pickup jumped 24 percent last month, helping overall Ford Division light truck demand advance 20 percent. Lincoln sales rose 2 percent.
The Chrysler Group's October sales rose 37 percent, its 7th consecutive month-over-month increase, aided by a favorable comparison to a year-ago. Jeep sales more than doubled on demand for the new Jeep Grand Cherokee. Ram pickup deliveries rose 41 percent to 17,316.
Chrysler sales are up 17 percent year-to-date.
At American Honda, sales jumped 16 percent. The availability of the new 2011 Odyssey minivan, in its first full month on the market, helped push Honda Division light-truck sales up 37.8 percent to 41,463, the auto maker said.
New crossovers help GM
GM's comparisons to last year continued to be dragged down by its discontinued brands. The company sold 15,089 Saab, Saturn, Hummer and Pontiac models in October 2009; last month, just 367 units of those brands were sold.
GM said sales of current and discontinued brands rose to 183,543 units. The 4 percent gain was better than the 3 percent decline that TrueCar.com analysts expected.
New crossover models such as the Chevrolet Equinox, GMC Terrain and Cadillac SRX, along with pickup trucks, are driving GM's results.
At Chevrolet, GM's biggest division, sales jumped 7 percent, with truck demand up 10 percent and car sales up 3 percent. GMC, GM's second-biggest division, said sales rose 32 percent last month, while Buick sales jumped 39 percent.
GM's year-to-date sales are up 6 percent.
The auto maker told analysts it is transitioning to new model year (2011) vehicles more rapidly than the industry, and expects to gain retail market share in October, compared with September.
“Of our October sales, 76 percent were new (2011) model year vehicles,” Don Johnson, head of GM's U.S. sales operations, said in a statement. “This puts us in good position to continue growing, while moderating our use of incentives.”
Toyota was hurt by a drop in demand for some of its top-selling car models, including the Camry mid-sized sedan and compact Corolla. The Toyota Division's passenger car sales slid 17 percent last month and are down 8 percent year-to-date.
Because of the U.S. elections held Nov. 2, October auto sales were released over two days.
Daimler A.G. said October sales of Mercedes-Benz, Smart and Maybach brands rose a combined 3 percent.
Hyundai-Kia Automotive boosted monthly sales 38 percent, lifting the South Korean auto maker sales to a 10-month advance of 19 percent. Hyundai and Kia say they will each set U.S. sales records this year.
Volkswagen of America gained 16 percent.
Subaru of America was up 25 percent. For the first 10 months, Subaru has sold 216,334 units, up 23 percent from the same period last year and only 318 vehicles short of its record annual sales set in 2009.
“Subaru's consistent success over the past three years is not only a testament to their product lineup and customer loyalty, but also an indicator of how well positioned they are as the industry starts to recover,” Edmunds.com senior analyst Karl Brauer said.
Mitsubishi's sales jumped 32 percent for the month to 5,111 units, helping to pull the auto maker's year-to-date results nearly even with 2009 levels.
BMW Group sold 23,248 BMWs, Minis and Rolls-Royces in October, up 13 percent.
Porsche's October sales jumped 61 percent, bringing this year's totals to a 28 percent gain from a year ago. Jaguar Land Rover boosted sales by 40 percent.
Even struggling Suzuki advanced. After its 17 percent October gain, Suzuki's U.S. sales are down 45 percent in the first 10 months of the year.
Through September, industry sales had been running about 30 percent slower than the 16.8 million annual average from 2000 through 2007.
“The business is moving from 2010s being sold at big discounts to 2011s sold at a premium,” said Jeremy Anwyl, CEO of Edmunds.com.
“The 2011s are doing OK, so there is some indication that consumers are willing to pay more for the newer models. They're hesitant but feeling a bit better.”
Industry spending on incentives declined slightly from September, according to estimates from Edmunds.com. It put the industry per-vehicle average at $2,498 last months, down $61 from the month before and $172 lower than in October 2009.
Toyota, the world's largest auto maker, had smaller discounts on 2010 model year vehicles compared with its competitors, said Ivan Drury, an Edmunds.com analyst.
Bloomberg contributed to this report, which appeared in Automotive News, a Detroit-based sister publication of Tire Business.