DETROIT (AP) -- U.S. auto sales fell sharply in October, dampened by hurricanes, fidgety consumers and high gas prices. Demand was down after a summer of heavily hyped discounts, and automakers warned that they don't expect an upswing in November.


General Motors, Ford and Nissan reported big declines Tuesday, while Toyota and Honda edged up and DaimlerChrysler's sales were flat. Sport utility vehicles took the biggest hit across all makers. Sales of the Ford Explorer, Lincoln Navigator, GMC Yukon, Hummer H2 and Toyota Land Cruiser were all down 50 percent or more.

DaimlerChrysler AG's Chrysler Group responded by putting a $1,000 incentive on all 2005 and 2006 vehicles. No other automaker made a similar announcement, although GM said it would remain competitive on incentives.

"We've got a consumer out there where the confidence levels have been slipping and they're concerned about the monthly budget," said Gary Dilts, Chrysler's senior vice president of sales.

"We feel the need to put some sort of incentive out there that answers the question, 'Why buy now?'" he said.

General Motors Corp., the world's biggest automaker, said its U.S. sales fell 22.7 percent in October from a year ago, led by a 30.3 percent decline in sales of trucks and SUVs. GM's car sales fell 10.6 percent for the month. Overall, GM's sales fell 2.7 percent for the first 10 months of the year.

Paul Ballew, GM's executive director of market and industry analysis, said it was the industry's worst month since 1998. But he said October must be viewed in the context of the summer sales blitz, which was fueled by U.S. automakers' employee-discount incentives. This year is still on track to be the second or third best in history for U.S. auto sales, Ballew said.

Meanwhile, GM's debt was slashed deeper into "junk" territory Tuesday after Moody's Investors Service lowered its long-term rating due to uncertainty about the company's massive restructuring.

Ford Motor Co.'s U.S. sales fell 23 percent in October from a year ago. Sales of Ford, Lincoln and Mercury trucks and SUVs fell 30 percent compared to last October, while car sales slipped 3.7 percent. Ford's popular F-series truck saw sales fall 32 percent.

"October wasn't a very good month for anybody," said George Pipas, Ford's U.S. sales analysis manager. "It was pretty much weak from the start and showed little improvement as the weeks progressed."

Ford said its new Ford Fusion, Mercury Milan and Lincoln Zephyr midsize sedans were notable exceptions, exceeding Ford's expectations in their first month in dealerships. Pipas said Ford expected to sell 2,700 Fusion sedans in October but sold more than 4,000. Ford's car sales rose 7 percent for the year, but overall sales fell nearly 3 percent.

Chrysler Group said its car sales rose a whopping 37 percent, and the Dodge Stratus sedan had its best October in nearly 10 years. But truck and SUV sales fell 9.5 percent and Chrysler's overall sales were flat for the month. Chrysler's sales were up 6.9 percent for the first 10 months of the year.

Dilts said Chrysler's retail sales fell by double digits but were propped up by fleet sales to corporations. He said Chrysler's fleet business accelerated with the launch of the LX vehicle line, which includes the Chrysler 300 sedan and Dodge Charger. The Jeep Grand Cherokee and minivans were also big sellers to corporate fleets.

"That's very good business for us. That's not a business we have been in," Dilts said.

U.S. automakers ended employee-discount programs -- which let consumers pay the employee price -- in the first week of October. They were expecting some payback after phenomenal sales this summer. GM began its discount in June, and Ford and DaimlerChrysler AG followed in July.

Asian automakers stayed out of the employee discount fray, but several of them experienced a downturn in October anyway.

Nissan Motor Co. said U.S. sales were down 19 percent, including a 23 percent dip in car sales. Nissan's overall sales were up 12.5 percent for the year.

South Korean automaker Hyundai Motor Co. said sales were down 7.7 percent in October, led by a 9.7 percent decrease in car sales. Hyundai's overall sales were up 8.4 percent for the year.

But Toyota Motor Corp. said its overall U.S. sales rose 5.2 percent in October, boosted by a 12.6 percent jump in car sales. Toyota's truck and SUV sales were down 4 percent for the month. Its hybrid Prius continued to dazzle, with sales up 68 percent over last October.

Toyota's sales rose 10.7 percent for the first 10 months of the year. Jim Press, president and chief operating officer of Toyota Motor Sales U.S.A., said he's optimistic heading into the last two months of the year.

"The incentive-induced daze is lifting, and the hurricane season is coming to a close," Press said.

Honda Motor Co. reported an increase of 4 percent, which the company attributed to strong sales of its redesigned Civic sedan as well as the new Ridgeline pickup. Honda's car sales were up 7 percent and truck sales were flat. The automaker's sales were up 6 percent for the year.

Sales percentages were adjusted for differences in the number of selling days. There were 26 selling days in October 2005 and 27 in October 2004.

On the debt rating cut for GM, New York-based Moody's said it continues to be concerned how auto parts maker Delphi Corp.'s cost-cutting measures will lead to actions by the United Auto Workers Union. In addition, Moody's said recently announced investigations by the Securities and Exchange Commission remain troubling. The agency's outlook for GM's debt is negative.

The ratings action affects $30 billion in GM debt, and could push its borrowing costs higher.

The credit rating agency lowered GM debt by two notches to a "B1" from a "Ba2," both speculative-grade ratings. Moody's said it continues to review its current ratings for General Motors Acceptance Corp. and Residential Capital Corp. for possible downgrades.

GM shares fell 21 cents to close at $27.19 on the New York Stock Exchange, while Ford shares lost 10 cents to close at $8.22 and DaimlerChrysler's U.S. shares fell 65 cents to finish at $49.40 Toyota's U.S. shares rose 46 cents to close at $93.27 on the NYSE, while Nissan's U.S. shares fell 18 cents to end at $20.77 on the Nasdaq Stock Market.

DaimlerChrysler AG's Chrysler Group responded by putting a $1,000 incentive on all 2005 and 2006 vehicles.

General Motors Corp., the world's biggest automaker, said its U.S. sales fell 22.7 percent in October from a year ago, led by a 30.3 percent decline in sales of trucks and SUVs. GM's car sales fell 10.6 percent for the month. Overall, GM's sales fell 2.7 percent for the first 10 months of the year.

But Toyota Motor Corp. said its overall U.S. sales rose 5.2 percent in October, boosted by a 12.6 percent jump in car sales. Toyota's truck and SUV sales were down 4 percent for the month. Its hybrid Prius continued to dazzle, with sales up 68 percent over last October.

Toyota's sales rose 10.7 percent for the first 10 months of the year.

Tony Van Alphen


May 02, 2007

The Canadian auto industry has smashed its sales record for April with a boost from the federal government's rebate program for fuel-efficient vehicles.
Sales and leases of new cars and light trucks jumped 9 per cent, or almost 14,000, to 168,984 vehicles last month from the same period last year, auto manufacturers reported yesterday.

That easily topped the previous record for the month in 2002 by almost 4,000 vehicles.

Auto sales for the first four months of the year are now up 3.7 per cent, or 18,000 vehicles, to 507,944 vehicles from the corresponding 2006 period.

Industry watchers said Ottawa's new program in March's federal budget contributed to the strong gain. The program gives motorists up to $2,000 if they buy a new auto that meets strict fuel efficiency criteria. It also penalizes buyers of some gas-guzzling vehicles up to $4,000.

"It certainly helped," said analyst Dennis DesRosiers. "Since the Canadian consumer primarily buys small fuel-efficient vehicles, this incentive helped propel the market to its best April on record."

In Ontario, consumers can also get tax credits of up to $2,000 for eligible fuel-efficient models.

DesRosiers suggested consumers buy a vehicle that qualifies for the federal rebate as soon as possible because it is costing Ottawa a lot of money and won't last.

Some auto makers experienced major increases in sales of fuel-efficient vehicles that qualified for the rebate. For example, sales of the Yaris subcompact sedan that includes a $1,000 federal rebate shot up 67.8 per cent to 2,511 last month.

Sales of the Ford Escape hybrid sport-utility vehicle, which qualifies for a rebate of up to $2,000, almost tripled to 98 last month.

DesRosiers also noted sales of Chevrolet Impala soared 54.7 per cent. It's one of the few mid-size models using environmentally friendly ethanol-85 and qualifies for a $1,000 rebate.

The big increase in Impala business fuelled a turnaround at General Motors of Canada Ltd. last month after significant monthly declines. GM's light vehicle sales jumped almost 16 per cent, or more than 6,000, to 44,651 despite two less selling days than April 2006.

DaimlerChrysler Canada Ltd. reported sales climbed 6.2 per cent to 22,514 in April – the ninth consecutive month the auto maker has posted a gain.

Ford Motor of Canada Ltd. said sales slipped 3.4 per cent to 21,973, though truck sales rose.

Meanwhile, booming Toyota Canada Inc. posted another record for April as sales inched up marginally to 21,243 on the strength of the Lexus luxury brand. Sales of Toyota brand vehicles dipped 1.2 per cent.

Business at Honda Canada Inc. improved 1 per cent to 15,117, while volumes at Mazda Canada Inc. shot up 27 per cent to 10,341 in April, the biggest sales month in the company's 39-year history here. At Nissan Canada Inc. sales soared 30 per cent to 7,455.

Among other strong performers, Hyundai's sales rose 11.2 per cent to 7,235; Volkswagen's volumes soared 22.5 per cent to 3,501; Mercedes-Benz deliveries jumped 14.6 per cent to 1,530 and BMW's business climbed 16.4 per cent to a record 2,258.

Sales in the U.S. dropped 7.6 per cent to 1.34 million in April from the 2006 period. Every major manufacturer reported declines.