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Automotive Consumer
AUTOS: Sales Rose In October, Analysts Predict
Annual sales rate was above 10 million for first time in 2009; used-car prices up 16 percent
SPEED Staff  |  Posted October 29, 2009   Santa Monica, CA.
Even beleagured Chrysler showed a month-to-month sales increase for such cars as the Dodge Challenger R/T. (Photo: Dodge)
October auto sales have been the best of 2009, with an 11.4 percent increase over September and a Seasonally Adjusted Annualized Rate of 10.35 million, Edmunds.com analysts predict.

Sales were still down 0.6 percent compared with October 2008, when dealers were feeling the effects of the economic downturn, but October 2009 seemed to signal a gradual recovery.

"This month’s SAAR will be the year’s highest, discounting the months when a government program helped spur sales," said Jessica Caldwell, director of Industry Analysis for Edmunds.com. "There are clear signs that the automotive industry is finally starting to recover despite the fact that low inventory levels – especially for old-model-year vehicles – are creating unfavorable comparisons with last October."

October 2009 had 28 selling days, one more than last October 2008. When adjusted for this difference, sales decreased 4.1 percent from October 2008.

The combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates is estimated to be 44.7 percent in October 2009, down from 47.4 percent in October 2008 and up from 44.5 percent in September 2009.

"We anticipate that in October, General Motors will achieve its highest market share year-to-date, said senior analyst Michelle Krebs in her report on Edmunds' AutoObserver.com. “The company has some momentum at the moment, and its investment in incentives and marketing seems to be paying off.

"Ford’s market share is hovering in the same range it has for the past year, while Chrysler has lost 3.5 points of market share in the past year, mostly to Hyundai and Kia.”

For the domestics, Chrysler is expected to be up 4.3 percent from September 2009, Ford will be up 12.6 percent and GM up 14.8 percent. Compared with October 2008, Chrysler will show a drop of 31.4 percent, Ford will be off 3.5 percent and GM will be up 5.7 percent.

For the Asian imports, Honda will be up 14.4 percent from September 2009, Nissan will be up 15.8 percent, Toyota will be up 13.2 percent and Hyundai will be down 5.5 percent. Compared with October 2008, Honda will be up 2.9 percent, Nissan will be up 12.7 percent, Toyota down 6.2 percent and Hyundai down 5.5 percent.

Meanwhile, Edmunds researchers have found that prices for late-model used cars have risen 16 percent compared with this time last year. Typically, year-to-year prices rise 4.6 percent.

“The remarkable price increase is easily attributed to basic economic principles: used car supply is down, and demand is up,” said Edmunds.com analyst Joe Spina. “Why is supply down? In recent years, automakers largely withdrew from leasing and now the effects are starting to kick in, so off-lease inventory is starting to dry up.

“Also, thanks to relative softness in the new-car market, there aren’t as many used cars being traded in. Meanwhile, demand is up because many traditional new car shoppers are now considering used due to the economy.”

Domestic cars are benefitting the most from the price spike, the researchers found. Three-year old domestic cars are selling for about 18 percent more than they did this time last year, while European used-car prices fell during the same period.
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