GM Sales Rose 20% in September; Chrysler Up 27%
Major automakers posted double-digit percentage U.S. sales gains for September in a rebound that General Motors 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 Motor sales rose 9 percent and Chrysler Group was up 27 percent.
Sales for Toyota Motor dropped almost 18 percent for September, its first month at normal production levels since the March earthquake in Japan. Honda Motor sales declined by 8 percent.
The initial reports put industrywide sales on track to near or above 13 million vehicles on an annualized basis, at the high end of the range of forecasts. That would represent the strongest sales rate since April.
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."
Despite fears of a renewed downturn and volatile financial markets in September, industrywide U.S. auto sales were lifted by the return of customers who had been putting off replacing aging vehicles since the industry's downturn began in 2008.
"As the economy seems to be stabilizing a little bit, I think there are a lot of people who had been postponing buying new vehicles now finally coming to replace vehicles," said Ford economist Jenny Lin.
Nissan Motor, which restored production faster than Toyota and Honda after the March earthquake in Japan, saw a sales gain of 25 percent. Volkswagen AG posted a sales increase of 36 percent.
Sales of pickup trucks and SUVs were especially strong in September, bolstered by steady gasoline prices in the month and stepped-up sales incentives.
Sales of GM trucks and SUVs rose 34 percent. Sales of the same category of big vehicles at Ford were up 24 percent. At Chrysler, sales of trucks and SUVs jumped 35 percent.
In another indicator of economic resilience, U.S. factory activity expanded at a faster pacethan expected in September, the Institute for Supply Management said on Monday.
U.S. auto sales represent one of the earliest snapshots of consumer demand.
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.
"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.
GM shares were down 2.2 percent, and Ford shares were down 2.6 percent Monday afternoon on the New York Stock Exchange.
Expectations for recovery
Morgan Stanley analyst Adam Jonas, who rates GM shares "overweight," said in a note for clients that it was "hard to knock GM's September performance."
Jonas said GM deserved credit for running down its inventory of pickup trucks to 88 days of supply at the end of the month, down from 107 days in August.
"GM continues to deliver on what it can control while its stock price continues to trade on fears of what it cannot," he said.
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.
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.
Analysts and auto executives said they expected to see sales strengthen through the remainder of 2011.
"The worst is behind us and we expect to exceed year-ago sales levels beginning in October with continued growth throughout the fourth quarter," said Bob Carter, the head of Toyota brand sales in the United States.
GM, Ford and Nissan all said they expected to see industrywide sales gain in the current quarter.
"You'll see more marketing and a moderate increase in incentives," said Al Castignetti, the U.S. chief for the Nissan brand. "December is going to be a barn-burner because everybody is going to be trying to close out the calendar year with a bang."