Ford Sales Rise 40%, Chrysler Up 60% as Industry Shows Signs of Rebound

Ford Motor Co. posted a 40 percent increase in U.S. sales last month and Chrysler Group soared 61 percent as the industry showed signs of rebounding from an August slump.

General Motors Co. said its sales rose 11 percent from September 2009 levels, when inventories were depleted after the U.S. cash for clunkers incentives expired. Among Japanese automakers, Toyota Motor rose 17 percent, American Honda advanced 26 percent, and Subaru climbed 47 percent.

Of the first 12 companies to report, only one – Suzuki – recorded a decline last month. The results support projections that September results may be among the strongest so far this year.

“It’s a solid month, another step in a stable, somewhat painful recovery,” said analyst Jesse Toprak of TrueCar.com. “We’re still missing a catalyst to boost the selling rate past 12 million, but this may be a healthier way to recover.”

September sales were projected to reach a seasonally adjusted annual rate of 11.7 million vehicles, according to nine analysts’ estimates compiled by Bloomberg.

August sales had fallen 21 percent — the year’s only drop — as the industry fought comparisons to a year-earlier month that was boosted by the clunkers program.

23 out of 24

Ford’s increase marked the automaker’s highest monthly percentage increase since February’s 43 percent gain. Sales boss Ken Czubay said September would reflect Ford’s 23rd increase in U.S. market share in the past 24 months.

“The key to our success is the relentless cadence of new vehicle, powertrain and technology introductions,” he said in a statement.

That would top the 9.5 million pace of September 2009, the inventory-short month after the U.S. clunkers program ended, and would approach the 11.8 million rate posted in May — the year’s best month so far, according to the Automotive News Data Center.

September’s increase lifted GM sales through nine months to 6 percent above year-earlier levels. It was the eighth monthly gain for GM so far this year, following a 25 percent August decline.

Among GM’s four surviving brands, GMC led the increase with a 41.6 percent gain. The automaker said Buick rose 36.2 percent, Chevrolet was up 18.5 percent and Cadillac advanced 11.3 percent.

The September gain helped GM transition from holdover 2010 models to new 2011 vehicles, said GM’s Johnson.

“Our plan is working,” he said in a statement. “With key products like our heavy-duty pickups, Buick Regal and the Cadillac CTS Coupe launching now, and expanded capacity for the Chevrolet Equinox and GMC Terrain hitting dealer lots, we’re ready to run.”

Slow return

Consumers are slowly returning to dealers’ showrooms while remaining concerned about the security of their jobs, said Paul Ballew, chief economist for Nationwide Mutual Insurance Co. in Columbus, Ohio. U.S. deliveries for all of last year fell to 10.4 million, the lowest since 1982, compared with the average 16.8 million vehicles a year from 2000 to 2007.

“It confirms to us that the recovery has gained a little bit of momentum in the third quarter and is somewhat back on track, but it is still a very slow recovery,” Ballew, a former GM economist, said before today’s results were released.

The Conference Board reported on Sept. 28 that consumer sentiment this month declined to the weakest level since February.

Replacing vehicles

Consumers are buying new cars and trucks largely because they must replace vehicles that have come off lease or broken down, said Jeff Schuster, executive director of forecasting at J.D. Power & Associates.

“The consumer is still taking cover and still a little confused by how to read all of the variables out there,” Schuster said. “Confidence is still skittish with the consumer, and I think it’s something that’s going to take a little bit longer to come back, even once we look at an economy that’s actually growing again.”

The worst recession since the 1930s ended in June 2009, the National Bureau of Economic Research’s Business Cycle Dating Committee said last month.

Sales to individual consumers, as opposed to fleet buyers such as rental-car companies, may rise to a 9.5 million pace, the average of four analysts’ estimates.

That would be the first time since mid-2008 that the retail rate exceeded 9 million vehicles for three straight months, Chris Ceraso, a Credit Suisse AG analyst, said in a Sept. 28 note.

Fleet sales will account for 19 percent of deliveries, up from 16 percent in August, Ceraso said.

Truck sales

Small businesses and fleet customers may have contributed to higher truck sales, said Joe Barker, senior manager of North American vehicle sales forecasts at IHS Automotive.

Tight credit for some consumers restrained deliveries, with buyers who missed mortgage payments being denied or asked to prepay as much as 30 percent of the sticker price, said Jesse Toprak, vice president of industry trends for TrueCar.

Automakers decreased sales incentives and discounts by an average of 2 percent from last year, which may have kept sales from gaining more, according to TrueCar.

Ford incentives

Ford was the only U.S. automaker to raise incentive spending, TrueCar said. Ford’s average discounts rose 7.4 percent from last year to $2,797 per vehicle, while Chrysler decreased incentive spending by 23 percent to $3,787 and GM cut incentives by 11 percent to $3,403.

Honda’s incentive spending rose 68 percent to an average of $2,166, according to TrueCar. Toyota boosted discounts by 38 percent to $1,870, and Nissan increased them 10 percent to $2,980.

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