Tuesday November 3, 09:24 PM
US auto sales stabilize, but Chrysler sputters
By Rob Lever
WASHINGTON (AFP) - The US auto market steadied in October, recovering from the end of government trade-in incentives, despite a dismal month for the struggling Chrysler Group, monthly sales data showed Tuesday.
The overall market for new US vehicles was an annual pace of 10.46 million -- up sharply from 9.22 million in September but below the October 2008 level of 10.82 million, according to market research firm Autodata Corp.
The big US automakers saw a mixed month, with General Motors (NYSE: GM - news) and Ford Motor Co. improving modestly and rival Chrysler (Xetra: 710000 - news) suffering a sharp year-over-year drop of 30 percent.
Jessica Caldwell, analyst at Edmunds.com, said Chrysler, set to unveil future plans Wednesday, is "in desperate need of a new message."
"They are still struggling with a lot of carryover products, they have nothing new in their arsenal," she said.
"What they are doing it is not working."
Chrysler Group reported total US sales for October of 65,803 units, down 30 percent from a year earlier. Despite the year-over-year drop, the figure was up six percent compared with September.
The new Chrysler is an alliance with Italy's Fiat (Milan: F.MI - news) , which took a stake in the number three US automaker under a government-backed bankruptcy reorganization.
Chrysler announced it would offer zero percent financing on many cars along with other incentives in November (Frankfurt: A0Z24E - news) as part of its effort to spark more sales.
"The industry showed signs of improvement this month with increasing sales, which is a trend we expect to continue for the remainder of the year," said Chrysler executive Fred Diaz.
"Chrysler Group expects to get its fair share of the increases as November and December traditionally are two of the best months for SUV (sport utility vehicle) sales, and the Jeep brand offers customers the best SUVs in the marketplace."
GM said it sold 177,603 new vehicles in the month, up four percent from last October, the company's first year-over-year gain since January 2008.
Sales were up 13 percent from September, which saw a pullback in car buying following the end of government incentives for trade-ins under the "cash for clunkers" program, which ended in August.
GM, which like Chrysler underwent a bankruptcy restructuring with US government support, said it was pleased with the performance of its four core brands, which accounted for about 95 percent of GM's retail sales.
"We're very pleased with consumer acceptance to our newest cars, crossovers and trucks," said Susan Docherty, GM vice president for US sales.
"While we have more work to do, we are making progress and will continue our focus on delivering vehicles and a sales and service experience that brings consumers to Chevrolet, Buick, GMC and Cadillac -- and keeps them coming back."
Ford (NYSE: F - news) said US sales rose 3.1 percent from a year ago, the third increase in the past four months for the number-two automaker. Total (FP.NX - news) sales of new cars under the Ford, Lincoln, Mercury and Volvo (Stockholm: VOLV-B.ST - news) brands rose to 136,920 last month.
The figure was up 21 percent from September.
Ford said its retail market share was up for the 12th time in 13 months, helped by the new Taurus sedan and increased sales of its "crossover" sport utility vehicles.
"Consumer demand for our new high-quality, fuel-efficient products is driving Ford's market share gains," said Ken Czubay, Ford vice president.
"Ford vehicles are among the 'freshest' available by any automaker -- with more than 80 percent of our sales in October coming from our new 2010 models."
Ford, the only one of the Big Three US automakers to avoid bankruptcy and a government bailout, on Monday posted surprise earnings of nearly a billion dollars for the past quarter and said it was on track to become "solidly profitable" by 2011.
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