* US Oct auto sales up 7 pct, best October level since 2007
* Sandy caused industry to lose 20,000-30,000 vehicle sales
* Industry likely to recoup those lost sales in Nov-Dec
* Ford, GM shares both rise nearly 1 pct
(Updates with final sales results, closing stock prices)
By Ben Klayman and Bernie Woodall
DETROIT, Nov 1 Superstorm Sandy's fury caused
U.S. auto sales to fall short of expectations in October, but
industry executives still see a strong fourth quarter as the
housing market improves.
While General Motors Co and Chrysler Group LLC both
reported their strongest sales for October since the 2007-09
financial crisis, the massive storm that hit the U.S. East Coast
took as much as 30,000 vehicle sales out of the mix by keeping
shoppers away from dealers.
"Clearly, the storm had a bigger than anticipated impact on
sales," said TrueCar.com analyst Jesse Toprak. "It's not the
blockbuster month perhaps that we anticipated, but I would still
say it's a healthy rate."
The U.S. auto industry ended October with a 7 percent
increase in vehicle sales to more than 1.09 million, the highest
level in October since 1.23 million sales were reported for that
month in 2007. That was below the 11 percent increase analysts
had expected, however.
Auto sales are an early indicator each month of U.S.
Ford Motor Co's U.S. sales last month edged up 0.4
percent, while sales for Toyota Motor Corp and Honda
Motor Co rose about 16 percent and 9 percent,
respectively. Nissan Motor Co Ltd's sales fell 3.2
GM sales rose 4.7 percent, while those at Chrysler, the
automaker controlled by Italy's Fiat SpA, increased 10
Still, results from all the major automakers came in below
expectations, and the 14.3 million annual selling rate in
October fell well short of the 14.9 million economists had
predicted before Sandy pummeled the East Coast. Toyota said that
until Sandy arrived, the industry had been heading for an annual
selling rate of 14.7 million vehicles.
Auto executives and analysts said the industry will recoup
much of the Sandy-related lost sales in November and December,
especially after election day on Tuesday. Some automakers,
including GM, Nissan and Toyota, are even offering deals to
customers in regions hit by the storm.
Over the last five years, the U.S. auto sector has undergone
a wrenching overhaul that led to plant closures, job losses and
the government-financed bankruptcy restructurings of GM and
Chrysler in 2009. Ford also overhauled its U.S. operations, but
did not take a government bailout.
The October sales report will be the last before election
day, marking the end of a contentious U.S. presidential race
that has repeatedly thrust GM and Chrysler into the spotlight in
televised debates, stump speeches and campaign advertisements.
"As far as the election is concerned, they've made the
economy a centerpoint of their mudslinging," Kurt McNeil, GM's
vice president of U.S. sales operations, said on a conference
call. "That just has caused some uncertainty in the consumers'
minds. Once we get past the election, all of these strong
economic fundamentals are going to continue to play out."
Citing an improving housing market that should help the
industry record a strong fourth quarter, GM sees industry sales
for this year at close to 14.5 million vehicles. Ford expects
about 14.4 million. That would be the highest annual total since
16.1 million vehicles in 2007. Consumers generally feel more
comfortable making big-ticket purchases such as cars when home
values are rising.
The massive storm, which hit the U.S. Northeast on Monday,
hurt U.S. demand at the end of the month, with Ford officials
estimating the lost sales for the entire industry at 20,000 to
25,000 vehicles. Toyota estimated the loss at 30,000 vehicles.
Ford officials said their estimate translates to a hit to
October's annual sales rate of 300,000 vehicles. GM officials
agreed, saying Sandy hurt the annual rate by at least 300,000
TrueCar's Toprak said dealers often exceed 40 percent of
total sales for any month in the last seven days. GM said its
dealers from the Washington area through New England, including
parts of Pennsylvania, had damaged cars and some were literally
under water. In fact, half of GM's dealers in New Jersey were
still without power.
Volkswagen AG's U.S. operations chief, Jonathan
Browning, sounded a note of caution.
"This is not yet a full-blown recovery," he said on a
conference call. "The overall environment is one of improving
optimism, but it's still not a strong positive development in
terms of the overall economy."
He added that demand had been choppy in some regions even
before Sandy. The German automaker's combined U.S. sales for its
VW, Audi and super luxury brands rose 20 percent in October.
Many automakers still made gains in the month as rising home
prices, attractive vehicle financing options and Americans'
growing need to replace their aging cars spurred more consumers
to showrooms. That bodes well for the future, as GM's McNeil
said an improving housing market could be the "final piece of
the puzzle" that lifts industry sales above 15 million annually.
The sales report also caps a busy week for the U.S. auto
industry, which saw third-quarter profit reports from all three
GM shares closed 0.7 percent higher at $25.68 on Thursday,
while Ford shares gained 0.8 percent to close at $11.25.
(Additional reporting by Paul Lienert and Deepa Seetharaman in
Detroit; editing by Gerald E. McCormick and Matthew Lewis)