Back to Headlines Print Version Buzz Up Stumble it Tweet it Facebook LinkedIn

Smallest US Retail New-Car Sales Drop Seen In 17 Months In Oct

DOW JONES NEWSWIRES

J.D. Power and Associates is projecting October will see the first single- digit decline for new-vehicle retail sales in the U.S. auto market, excluding cash-for-clunkers impacts, since May 2008.

But the news isn't exactly rosy, as sales were crumbling a year ago in the wake of the financial crisis hitting full steam.

"While year-over-year comparisons benefit from a low selling base in October 2008, improvements in consumer confidence and credit are propelling the return to positive sales gains relative to last year," said J.D. Power executive Gary Dilts.

He noted the industry is poised to report an annualized selling rate of 10.3 million vehicles for the month, compared with 10.5 million last year. Dilts called the projection "an encouraging sign for the industry and in line with our expectations for the rest of the year."

Car sales tumbled through the end of 2008, resulting in annualized sales rates in the first months of this year near 9 million, a multi-decade low. Before the downturn of the past several years, the annual U.S. selling rate was at or about 16 million.

For October, J.D. Power expects new-vehicle retail sales in the U.S. to be down 2.5% while fleet sales--which many auto makers amid their restructurings have been lessening because they are generally less profitable--are seen dropping just 0.5%. Adjusting for this month having an extra selling day than last October, the projected declines are 6% and 4%, respectively.

From September, J.D. Power said auto sales are little changed on a market- share basis except for pickup trucks, which are on basis to gain some two percentage points to about 14%.

"As economic conditions improve, there's a renewed sense of optimism and momentum building in the industry," J.D. Power forecasting chief Jeff Schuster said Friday. "While 2009 has been a difficult year, this crisis will lead to innovation and efficiency gains, ultimately creating a healthier industry. Total sales in 2010 are expected to improve 12% from 2009, but given the right conditions, next year could be even stronger than currently predicted."

-By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354; kevin.kingsbury@ dowjones.com

  (END) Dow Jones Newswires
  10-23-091041ET
  Copyright (c) 2009 Dow Jones & Company, Inc.