03 November 2010

For Automakers, Strong Sales in October

NY Times

DETROIT — October was the best month for new-vehicle sales in more than two years, outside of the government rebate program in mid-2009, and General Motors surpassed expectations, but still lost market share in the United States ahead of its public stock offering.

G.M. said Wednesday that its sales rose 3.5 percent last month from a year ago, compared with a gain of about 13.4 percent for the industry over all. G.M.’s market share fell to 19.3 percent from 21 percent a year ago.

The Ford Motor Company said its sales were up 19.2 percent, and Chrysler reported a 37 percent increase from a mediocre October 2009. Several smaller companies, including Hyundai, Kia and Subaru, set new October records, with increases of at least 25 percent.

Toyota was the only major automaker to report a decline. Its sales fell 4.4 percent. The industry’s seasonally adjusted annualized selling rate was projected to hit at least 12 million for the first time since September 2008, when auto sales began to collapse. Sales bottomed out in early 2009, but automakers have struggled to gain much traction since then.

“Signs are there that the recovery continues and that it will be sustained,” Don Johnson, G.M.’s vice president for United States sales operations, said. “We don’t see a big risk at all of a double dip.”

For all of 2010 so far, G.M.’s sales are 5.7 percent higher than in the first 10 months of 2009, when the company shed four brands after a brief trip through bankruptcy protection. Excluding those brands — Pontiac, Saturn, Hummer and Saab — G.M.’s sales are up 22.1 percent this year.

G.M. executives will highlight the company’s rising sales as they begin a traveling “road show” to court investors starting this week. The company is expected to initiate its initial public offering in mid-November, allowing the federal government to begin selling its 61 percent stake.

Ford, which avoided bankruptcy, said sales were up 25 percent for its trucks and 23 percent for its passenger cars, but only 10 percent for its utility vehicles. The company sold 3,846 of its new subcompact car, the Fiesta, with 62 percent of buyers replacing a non-Ford vehicle.

“The consumer is crawling back, particularly in the more affluent and higher-quality credit segments, which could provide upside to our 2011 outlook,” Brian A. Johnson, an analyst with Barclays Capital, wrote in a recent note to clients.

Jesse Toprak, vice president for industry trends and insight at TrueCar.com, which tracks vehicle sales and pricing, said the improving performance of automakers showed that “a recovery is under way,” even though the growth had been slower than anticipated.

“If the trajectory continues in the same path, we could have a strong finish to the year,” Mr. Toprak said.

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