PREVIEW-Automakers expect Oct U.S. sales best month of year

* What: October U.S. auto sales

* When: Most automakers report sales on Wednesday, Nov. 3

* Consensus: 11.85 mln seasonally adjusted annual rate

* Strongest 2010 sales rate seen, recovery still slow

By David Bailey

DETROIT, Nov 1 (BestGrowthStock) – U.S. auto sales are expected to
have hit their strongest monthly sales of 2010 in October, butthe industry is still reflecting the slower than expected U.S.
economic recovery overall.

General Motors Co [GM.UL], which is expected to complete an
IPO this month that will allow the U.S. government to begin to
reduce its stake in the company, is also expected to lead the
industry in U.S. sales in October. [ID:nN01156930]

Ford Motor Co (F.N: ) is expected to be No. 2 in U.S. sales
for October, building on its lead over No. 3 Toyota Motor Corp
(7203.T: ) and punching its share of the market up by a full
percentage point year-over-year, according to Edmunds.com.

Some 38 economists polled by Reuters on average expect auto
sales at an 11.85 million seasonally adjusted annualized rate,
or SAAR. That would be the strongest rate yet for 2010, but
still far below the 16 million plus annualized rates of 2007.

“Clearly the direction is right,” TrueCar.com analyst Jesse
Toprak said. “I’m not sure if the angle of the trajectory is
high enough.”

IHS Automotive analyst Chris Hopson said consumers still
face “plenty of headwinds” from the weak jobs and housing
markets, to tight credit and high debt levels.

“Until consumers see a lot of positive momentum or hear a
lot of things, I don’t think we are going to see an uptick in
consumer spending any time soon,” Hopson said.

The annualized sales rate is expected to increase in
October from 11.7 million in September, snapping a trend of
see-sawing month-to-month results throughout 2010.

That might indicate “perhaps a little bit of momentum in
the market, but we are not at levels that anybody is going to
rejoice too much about right now as the economy trudges along
here,” Hopson said.

‘ENCOURAGED’ BY OCTOBER

Edmunds expects total industry sales to be up 10.8 percent
in October from a year earlier with some increase in consumer
confidence and pent-up demand for vehicles.

The October U.S. sales period ends on Monday and a large
percentage of transactions are completed in the closing days of
the month. Some automakers report results on Tuesday, while the
top-selling companies in the U.S. report on Wednesday.

TrueCar.com expects GM sales to be down 3.4 percent in
October from a year earlier, Ford up 16.9 percent, Toyota down
5.4 percent, Honda Motor Co Ltd (7267.T: ) up 16.6 percent,
Chrysler [CCMLPD.UL] up 40.3 percent and Nissan Motor Co Ltd
(7201.T: ) up 16.1 percent.

Nissan expects to report a double-digit percentage increase
for its U.S. sales in October from a year earlier for both its
Nissan and Infiniti brands, Nissan Americas Chairman Carlos
Tavares told reporters at an event in Detroit on Monday.

U.S. auto sales totaled about 10.4 million vehicles in
2009, the lowest in more than a quarter century, as GM and
Chrysler fell into bankruptcies supported by the U.S.
government.

“We are encouraged by the potential for two consecutive
months of a near-12 million unit SAAR, especially since
September’s exit rate was weaker than the start of that month,”
JP Morgan analyst Himanshu Patel said in a note on Monday.

JP Morgan expects an 11.9 million vehicle annualized sales
rate, up slightly from September, and total sales of about 11.5
million cars and light trucks for the year. JP Morgan expects
sales to grow to about 12.5 million vehicles in 2011.

TrueCar.com expects October U.S. auto sales at a 12 million
vehicle annualized rate and Barclays Capital analyst Brian
Johnson said sales could exceed a 12 million unit rate.

IHS Automotive expects U.S. light vehicle sales to rise to
about 12.8 million in 2011 from 11.4 million this year.

In its third-quarter earnings release last week, Ford
estimated 2010 U.S. auto industry sales at 11.6 million
vehicles, including medium and heavy duty trucks that tend to
comprise up to 300,000 sales annually.
(Reporting by David Bailey and Deepa Seetharaman; editing by
Andre Grenon)

PREVIEW-Automakers expect Oct U.S. sales best month of year