The auto industry recorded its worst October for U.S. sales in 13 years as many consumers stayed out of showrooms following a summer of...
DETROIT — The auto industry recorded its worst October for U.S. sales in 13 years as many consumers stayed out of showrooms following a summer of deep discounts.
New car and truck sales in October totaled 1.15 million, a 14.1 percent drop from the same month last year, sales analysis firm Autodata reports. With gasoline prices still high, SUVs and other light trucks fell 22.1 percent.
The average incentive offered per vehicle dropped by more than $550 from October a year ago as the automakers ended employee-pricing deals.
The domestic automakers all slid in overall sales. Ford’s results dropped 25.7 percent from the same month a year ago, General Motors sales fell 25.9 percent, and DaimlerChrysler’s performance was off less, with a decline of 2.8 percent from a year ago.
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But some foreign automakers also took a dive. Nissan’s U.S. sales fell 16.5 percent and Hyundai’s U.S. sales declined 11.2 percent. Toyota posted a modest 1.3 percent gain.
The declines, widely expected after automakers stopped offering employee prices, come on top of a 7.6 percent industrywide slowdown in September.
“It was pretty much weak from the start and showed little improvement as the month progressed,” George Pipas, Ford’s top sales analyst, said of October sales.
GM executives had a similar assessment.
Paul Ballew, GM’s executive director of global market and industry analysis, said October was “… quite simply a difficult month for us.”
DaimlerChrysler already was rolling out new deals on its Chrysler Group vehicles in hopes of getting sales up for the rest of the year. The company announced Tuesday it would offer a $1,000 cash-back bonus on 2005 models and some 2006 models.
“We feel the need to put some kind of incentive out there that answers the question, ‘Why buy now?’ ” said Gary Dilts, senior vice president for sales for Chrysler Group.
The automakers cited payback as a major factor for the October declines. Payback is the phenomenon when strong sales are followed by weak sales, largely because consumers who intended to buy a new product were pulled into the market earlier than they might have been otherwise.
Payback tends to even out overall results, unless demand for a product is actually growing.
That doesn’t seem to be the case.
For the year through October, Ford sales are now down 3.7 percent compared with the same period a year ago. GM is down 3.4 percent. DaimlerChrysler, meanwhile, is up 5.5 percent.