U.S. October Auto Sales Little Changed; GM, Ford Gain

By Jeff Green

Nov. 3 (Bloomberg) -- U.S. October auto sales were little changed as General Motors Co. and Ford Motor Co. had their first combined gain in three years, helping the industry rebound from a drop in demand after the so-called cash for clunkers program.

Sales climbed 4.1 percent from a year earlier at GM, its first monthly gain since January 2008, and 3.1 percent at Ford, the companies said today. Toyota Motor Corp.’s increased less than 1 percent, Nissan Motor Co.’s rose 5.6 percent and Hyundai Motor Co.’s were up 49 percent. Sales fell 0.4 percent at Honda Motor Co. and 30 percent at Chrysler

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“The economy is beginning to recover,” Dana Johnson, chief economist at Dallas-based Comerica Bank, said in an interview. “We probably lost some car sales in September because inventory was so low they couldn’t make deliveries. Auto sales are now probably trending up and they should be up noticeably in the first quarter.”

The seasonally adjusted annual rate was 10.46 million for October, the first month to exceed a 10 million pace without the benefit of the federal rebates, Autodata Corp. said. Total sales of cars and light trucks fell by 104 vehicles from a year earlier, to 838,052, according to the Woodcliff Lake, New Jersey-based research firm.

October’s showing improved from a 23 percent slide the previous month after the end of the federal rebates of as much as $4,500 for buyers who traded in older, less fuel-efficient vehicles. The program ran from July 27 through Aug. 24, contributing to an August increase that was the industry’s first monthly gain since 2007. 

‘Positive Spin’

“It does look like there will be positive spin from October and that’s a breath of fresh air after the roller coaster of a year we’ve had,” said Stephanie Brinley, an analyst at AutoPacific Inc. in Troy, Michigan. “There may still be some monthly declines going forward, but probably not the sustained drops we saw over the last two years.”

The sales pace in October 2008 was 10.82 million vehicles, Autodata said. Sales for all of last year were 13.2 million.

Before a 5.1 percent drop in September, Ford posted U.S. sales gains in July and August, powered by consumer demand for the clunkers cash. That was the first time that Ford, GM or Chrysler increased deliveries for two or more months since GM’s August-October streak in 2007.

Ford yesterday also reported surprise third-quarter net income of $997 million and the Dearborn, Michigan based company’s first operating profit since early 2008 on smaller discounts and higher sales.

“Ford surprised us again,” Michelle Krebs, a senior analyst at Edmunds.com, which predicted a 6.9 percent decline for the automaker, told Bloomberg Television. “They surprised us with their profit yesterday, too. They have some really strong products that are doing well.”

GM, Ford

GM, the largest U.S. automaker, sold 177,603 cars and trucks in October, compared with 170,585 a year earlier, according to a statement from the Detroit-based company.

“Clearly, we’re seeing improvement in the economy and in the industry,” said Michael DiGiovanni, GM’s sales analyst.

Ford, second biggest among U.S. automakers, reported sales of 136,920 cars and trucks, rising from 132,838. It was the company’s third gain in the past four months.

Toyota, the world’s biggest automaker, said its sales increased to 152,165, from 152,101. Honda reported that it sold 85,502 new vehicles, dropping from 85,864. Nissan, based in Yokohama, Japan, posted sales of 60,115 Nissan and Infiniti vehicles, up from 56,945.

Chrysler sales totaled 65,803, a drop from 94,530, the Auburn Hills, Michigan-based company said in a statement.

Analysts’ Estimates

GM, which had a 45 percent decline in October 2008 on reduced access to financing, was expected to report an adjusted gain of 4.6 percent, the average of seven analyst estimates. On that basis, GM’s sales rose 0.4 percent.

The estimates are based on daily selling rates. October had 28 selling days, one more than 2008. Ford, GM, Chrysler and some automakers don’t adjust for the difference in sales days. Toyota and Tokyo-based Honda are among those that use adjusted figures.