Toyota, GM lag as U.S. auto sales gain

By David Bailey

DETROIT (BestGrowthStock) – U.S. auto sales rose 13 percent in October, the best month of the year, led by a 19 percent gain at Ford Motor Co (F.N: ) while Toyota Motor Corp (7203.T: ) (TM.N: ) slipped.

As it released pricing details on a planned initial public offering, General Motors (GM.UL: ) said U.S. sales grew only 3.5 percent from the previous October. [ID:nN03133378] GM remained No. 1 in the market in total sales, ahead of Ford and Toyota.

Other major automakers all posted double-digit gains.

Still reeling from the aftermath of a wave of safety recalls earlier this year, Toyota posted a 4 percent sales decline. The top global automaker was the only company to report a drop in U.S. sales for the month.

Ford continued to gain share in its home market, supported by pickup trucks. Ford widened its lead over Toyota.

J.P. Morgan analyst Himanshu Patel called the Ford result “better than expected.” Ford shares ended more than 5 percent higher, hitting their highest level since 2004.

Industry-wide auto sales were up 13 percent from a year earlier in October. The sales rate on the annualized and seasonally adjusted basis tracked by analysts rose to 12.26 million vehicles, industry tracking firm Autodata said.

U.S. auto sales sank to the lowest levels in more than a quarter century in 2009 as credit tightened and consumers opted to hold on to aging cars longer. The industry’s recovery in 2010 has proved slower moving than most analysts had expected.

“It looks we’re going to be here at the end of the year where we thought we would be at the beginning of the year, Nationwide chief economist Paul Ballew said.

Toyota’s sales decline in October came as more consumers opted to buy larger trucks and sport utility vehicles, a category where the Detroit-based automakers have traditionally been strong.

Lifted by stable gasoline prices, sales of light trucks accounted for 52 percent of overall sales in October, the highest share since 2007.

“That accounted for a little bit of the drop,” said Toyota brand chief Bob Carter.

Analysts said Toyota’s lingering image problems from a wave of safety recalls earlier this year also appeared to have weighed on its results. The Japanese automaker vowed to step up sales incentives by offering lower financing and lease rates over the remainder of the year.

GM’s sales rose 12.8 percent for Chevrolet, Cadillac, Buick and GMC, the four brands that survived its 2009 restructuring in a bankruptcy funded and directed by the Obama administration. [ID:nN03128810]


With very little remaining inventory of 2010 models, GM was also able to push average sale prices higher by about $3,100, it said.

“We don’t see a big risk at all of a double-dip,” GM’s U.S. sales chief, Don Johnson, told reporters on a conference call.

Johnson said consumers have begun to hold on to vehicles longer than in the past in a fundamental shift in buying habits, but GM is confident it has restructured its business to run profitably even in a slower-growth market.

Separately, GM said in a statement released Wednesday afternoon that it posted a net profit of between $1.9 billion and $2.1 billion for the third quarter.

The release of preliminary GM results was one of the final hurdles to clear before the automaker filed an amended statement with U.S. securities regulators setting a pricing range for shares in its IPO.

Meanwhile, Chrysler’s sales rose 37 percent, the seventh consecutive month of year-on-year gains from the prior year when it emerged from its government-funded bankruptcy under the management control of Italy’s Fiat (FIA.MI: ).

Honda (7267.T: ) and Nissan Motor Co (7201.T: ) sales rose 16 percent each.

Ben Poore, who heads U.S. sales for Nissan’s luxury Infiniti brand, said the October sales reflected a waning of the deep uncertainty that had overshadowed the U.S. market.

“Consumers like certainty and that’s starting to happen and should continue now that we have the election out of the way,” Poore said.

South Korea’s Hyundai Motor Co (005380.KS: ) said its U.S. sales rose nearly 38 percent while its Kia Motors (000270.KS: ) affiliate posted a nearly 39 percent increase.

Volkswagen (VOWG.DE: ), Audi (VOWG_p.DE: ), BMW (BMWG.DE: ), Subaru (7270.T: ) and Porsche (PSHGp.DE: ) also reported sales increases in October from a year earlier on Tuesday.

Overall, the October results represented the first time that the closely watched sales rate had topped 12 million vehicles since the Lehman bankruptcy in September 2008, excluding the August 2009 sales that were boosted by the U.S. government’s “cash for clunkers” incentive program.

Sales remain well below the pre-recession levels of 2007 when annualized sales rates were in the 16 million range most months.

(Reporting by David Bailey, Kevin Krolicki, Bernie Woodall and Deepa Seetharaman, editing by Matthew Lewis)

Toyota, GM lag as U.S. auto sales gain