September auto sales up, allaying fears of recession
Oct 3, 2011, 9:29 a.m.
By Bernie Woodall and Ben Klayman
DETROIT (Reuters) - Major automakers posted double-digit percentage U.S. sales gains for September in a rebound that General Motors Co said showed the economy was likely to steer clear of a double-dip recession.
Among the Detroit automakers, GM sales rose 20 percent, while Ford's rose 9 percent and Chrysler Group was up 27 percent. Nissan Motor Co saw a sales gain of 25 percent and Volkswagen AG posted a sales increase of 36 percent.
The initial sales reports put industrywide sales on track to near 13 million vehicles on an annualized basis, at the high end of the range of analysts' forecasts.
That would represent the strongest sales pace since April and an increase of roughly 10 percent from the sales rate of September 2010.
Last month's auto sales were bolstered by increased inventory levels for Japanese automakers that had been depleted through the summer, by steady gasoline prices and a trickle back of demand from customers looking to replace aging vehicles, executives and analysts said.
GM sales chief Don Johnson said the September auto sales and other recent economic data "all point to a slow growth scenario but not a double dip."
GM kept its forecast for industrywide auto sales unchanged and said it expected to see increasing sales in October through December.
The top U.S. automaker forecasts overall U.S. vehicle sales of at least 13 million, including medium and heavy duty trucks. That would be up from the sales rate of 12.8 million on that basis in the year to date.
In another indicator of economic resilience, U.S. factory activity expanded at a faster pace than expected in September, the Institute for Supply Management said on Monday.
VW America Chief Executive Jonathan Browning said the September sales results pointed to a moderate increase in U.S. auto sales through the remainder of the year.
"It's hard to give a very simple summary because a lot of people are anxious about the future and you see that in the consumer sentiment, consumer confidence surveys, but at the same time many people are recognizing that this is a good time to buy," he said.
U.S. auto sales represent one of the earliest snapshots of consumer demand.
GM shares were up 1 percent at $20.41 around midday and Ford Motor Co shares were flat at $9.67.
CHRYSLER'S BEST SEPT. SINCE 2007
Chrysler, the No. 3 U.S. automaker, had its best performance for September since 2007. Chrysler is managed and primarily owned by Italy's Fiat SpA.
Stronger showings by Toyota Motor Corp and Honda Motor Co are expected, after the top two Japanese automakers in the U.S. market have returned to full production after having inventories slimmed after the March earthquake and tsunami in Japan.
During the past summer -- typically a busy sales period -- some consumers had held back from shopping for vehicles because the major Japanese automakers had an unusually spare stock of cars on dealer lots.
"A vehicle in content and color isn't something people are likely to compromise. They're more likely to wait. Now this is a release of some pent-up demand, which is exactly what we want to see," said IHS analyst Rebecca Lindland.
Both Toyota and Honda also increased sales incentives in September to lure back consumers, analysts have said.
U.S. new light vehicle auto sales were averaging 13.1 million on a seasonally adjusted annualized basis in the first four months of the year. A diminished supply of vehicles and auto parts began to cut into sales beginning in May.
The annualized sales rate dipped to 11.8 million vehicles from May to August.
Analyst Peter Nesvold of Jefferies & Co said last week that September will be the first month since April not to reflect the effects of the Japanese earthquake and the resulting production disruption.
J.D. Power & Associates as well as Edmunds.com forecast that September sales will be 12.9 million vehicles on the seasonally adjusted annualized basis the industry uses to monitor sales strength.
Before the industry downturn during the recent recession, U.S. also sales averaged nearly 17 million vehicles a year. Sales began to fall in 2008 and by 2009 hit the lowest level since the early 1980s, at 10.4 million vehicles sold.
(Reporting by Bernie Woodall and Ben Klayman, writing by Kevin Krolicki, editing by Matthew Lewis)