U.S. September Auto Sales Helped By Incentives.(Brief Article)

Most automakers posted better than expected U.S. sales in September as a wave of new discounts helped draw buyers into showrooms despite growing economic pessimism after the Sept. 11 attacks in New York and Washington.

The Chrysler side of DaimlerChrysler AG said its U.S. sales fell 28 percent from record levels in September last year, however, leaving it in a position where it may soon be close to being overtaken by Toyota Motor Corp. as the No. 3 seller of cars and trucks in America. Toyota's U.S. sales fell 4.2 percent in September to 127,203 units.

DaimlerChrysler, which announced it will cut 28,000 vehicles from production in October to lower its inventories of unsold cars and trucks, said it sold 152,162 vehicles in September. Detroit's traditional Big Three automakers have never been surpassed by an import automaker in U.S. sales.

The industry as a whole had been expected to report a decline of 12 percent to 15 percent in sales for September, with a seasonally adjusted annual rate of sales hitting 15 million, the lowest level in more than three years. And industry analysts had said the results were likely to signal the beginning of a slump that could last at least until the middle of next year, as unemployment rises and consumers turn increasingly negative about the U.S. economy.

But General Motors Corp., said its U.S. sales fell just 3 percent in September, steering far clear of analysts' calls for a decline of up 18 percent, and voiced confidence in sales going forward. Vehicle sales account for 22 percent of all U.S. retail sales and are key to pulling the economy forward, since auto manufacturing and related industries account for one out of every seven U.S. jobs.

"Industry sales - obviously adversely impacted by the terrorist attacks of September 11, 2001 - appear to be performing stronger than expected, keeping the industry on pace for the third best year ever," GM said in a statement.

Ford Motor Co. warned of lower-than-expected earnings for the third quarter after reporting that its U.S. sales, excluding import brands, fell 9.9 percent in September. The decline was due in part to the Sept. 11 attacks, as the dramatic falloff in air travel across the United States weighed heavily on sales of new vehicles to rental car companies.

But Ford easily beat analysts' predictions that its sales would fall as much as 20 percent. In late September, in the aftermath of the attacks on the World Trade Center and the Pentagon, industry officials said that fewer passengers in the skies over the United States means fewer cars rented on the ground, and that means less demand for new cars.

Ford warned, nonetheless, that it would not meet analysts' consensus expectations for the third quarter, which it said was currently a loss of up to 10 cents a share. Citing burgeoning market costs, Ford also said it would not meet its full-year earnings estimate of 70 cents a share before one-time items and said that if U.S. vehicle sales fall further during the fourth quarter, it would be forced to further cut production.

In the economic slowdown following the Sept. 11 attacks, Ford matched a program from GM offering zero-interest and low-interest loans on many of its cars and trucks, a program Ford called "very expensive." But even before the attacks there were signs that vehicle sales were slowing.

Print Get the Mag Weekly Updates