October Auto Sales Could Point to an Improving Market

Before you go, we thought you'd like these...
Before you go close icon
Car shopping at an auto dealerAfter several months of disappointing sales, automakers on Wednesday are expected to report a mixed picture for October. Last month's sales are forecast to be better than the dismal levels recorded in October a year ago, but compared to September 2010, the number of new vehicles that moved off dealers' lots is expected to have slipped slightly.

Still, the pace appears strong enough that October transactions will translate into the upper end of full-year sales forecasts of 11.5 million to 12 million units, up substantially from last year's abysmal sales of 10.4 million vehicles. In total, carmakers are expected to have sold about 928,000 cars and trucks during the month, according to forecasts from online buying guide TrueCar.com.

"We continue to see growth in [the pace of annual sales] for the overall industry and retail sales, indicating that a recovery is underway," says Jesse Toprak, automotive analyst at TrueCar.com. "If the trajectory continues in the same path, we could have a strong finish to the year."

Only One Month-Over-Month Increase


Among the largest suppliers to the U.S. market, Ford Motor (F), Honda Motor (HMC) and Nissan Motors (NSANY) are expected to report sales rose about 16% each compared to a year ago, while combined sales at South Korean automakers Hyundai Motor and Kia Motors likely jumped about 35%, TrueCar says.

TrueCar expects General Motors to report fewer sales than a year ago, with an anticipated 3.4% decline, along with recall-riddled Toyota Motor (TM), where sales likely dropped 5.4%. What's more, Ford is forecast to outsell Toyota once again in October, marking the seventh straight month the Dearborn, Mich., automaker has moved more metal than its Japanese rival.

When comparing October sales to those of September, only Honda is expected to report an increase -- and a modest one at that: 2.4%. The rise in sales at the nation's fourth-largest carmaker can be attributed to generous incentives Honda offered during the month to move leftover 2010 models off dealers' lots. At an average $2,312, Honda spent more on incentives in October than during any other month this year and more than double a year ago.

"Honda's boost in incentives enabled them to be the only manufacturer to improve on sales from last month," says Kristen Andersson, automotive analyst for TrueCar. Still, Honda's incentive spending was well below the industry average of $2,818 and larger than only that of Toyota and Hyundai/Kia.

Sponsored Links
The Big Three and Nissan all offered an average of at least $3,027 in incentives, with Chrysler outspending them all. The Auburn Hills, Mich., automaker likely doled out an average $3,629 in rebates, low-interest financing and other perks to woo new-car buyers. Overall, the industry spent 6.2% more in incentives last month than it did a year ago and 2.8% more than in September.

Though lackluster, October U.S. sales results will likely give Japanese automakers something to be upbeat about. In contrast, on Nov. 1, they reported big drops in sales in their home market -- the weakest since 1968 -- after a government subsidy program ended. Toyota said its October sales in Japan fell 27% compared to a year ago, while those at No. 2 Honda and third-place Nissan dropped 30% and 31%, respectively. At Mazda Motor, the pain was particularly acute -- sales plunged 52% in its home market.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners