Car shopping at an auto dealerAfter several months of disappointing sales, automakers on Wednesday are expected to report a mixed picture for October. Last month's sales are forecast to be better than the dismal levels recorded in October a year ago, but compared to September 2010, the number of new vehicles that moved off dealers' lots is expected to have slipped slightly.

Still, the pace appears strong enough that October transactions will translate into the upper end of full-year sales forecasts of 11.5 million to 12 million units, up substantially from last year's abysmal sales of 10.4 million vehicles. In total, carmakers are expected to have sold about 928,000 cars and trucks during the month, according to forecasts from online buying guide

"We continue to see growth in [the pace of annual sales] for the overall industry and retail sales, indicating that a recovery is underway," says Jesse Toprak, automotive analyst at "If the trajectory continues in the same path, we could have a strong finish to the year."

Only One Month-Over-Month Increase

Among the largest suppliers to the U.S. market, Ford Motor (F), Honda Motor (HMC) and Nissan Motors (NSANY) are expected to report sales rose about 16% each compared to a year ago, while combined sales at South Korean automakers Hyundai Motor and Kia Motors likely jumped about 35%, TrueCar says.

TrueCar expects General Motors to report fewer sales than a year ago, with an anticipated 3.4% decline, along with recall-riddled Toyota Motor (TM), where sales likely dropped 5.4%. What's more, Ford is forecast to outsell Toyota once again in October, marking the seventh straight month the Dearborn, Mich., automaker has moved more metal than its Japanese rival.

When comparing October sales to those of September, only Honda is expected to report an increase -- and a modest one at that: 2.4%. The rise in sales at the nation's fourth-largest carmaker can be attributed to generous incentives Honda offered during the month to move leftover 2010 models off dealers' lots. At an average $2,312, Honda spent more on incentives in October than during any other month this year and more than double a year ago.

"Honda's boost in incentives enabled them to be the only manufacturer to improve on sales from last month," says Kristen Andersson, automotive analyst for TrueCar. Still, Honda's incentive spending was well below the industry average of $2,818 and larger than only that of Toyota and Hyundai/Kia.

The Big Three and Nissan all offered an average of at least $3,027 in incentives, with Chrysler outspending them all. The Auburn Hills, Mich., automaker likely doled out an average $3,629 in rebates, low-interest financing and other perks to woo new-car buyers. Overall, the industry spent 6.2% more in incentives last month than it did a year ago and 2.8% more than in September.

Though lackluster, October U.S. sales results will likely give Japanese automakers something to be upbeat about. In contrast, on Nov. 1, they reported big drops in sales in their home market -- the weakest since 1968 -- after a government subsidy program ended. Toyota said its October sales in Japan fell 27% compared to a year ago, while those at No. 2 Honda and third-place Nissan dropped 30% and 31%, respectively. At Mazda Motor, the pain was particularly acute -- sales plunged 52% in its home market.

Increase your money and finance knowledge from home

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

Tea party movement has people in office ONLY IF THOSE PEOPLE ARE INDEPENDENTS.Beware of the infiltration of the Tea Party Movement by members of the Republican and Democratic parties which are trying to hijak and destroy the Tea Party Movement. People like Palin need to denounce their party and become independents to be real bonified TEA PARTY MEMBERS, otherwise they are nothing but a bunch of phonies that need to be more closely monitored.

November 02 2010 at 10:30 AM Report abuse +1 rate up rate down Reply

As of Tomorrow the Tea Party movement has people in elected office. The start of the 40 yr plan starts in Jan. Can you imagine no citizen on a Govt program in 40 yrs. We are teaching our Grand children now to have that mindset so they prepare and will be independent from Govt even in their old age. That thought will have progessives dropping from heart attacks as its the opposite direction they want, which is total Govt.

November 02 2010 at 9:52 AM Report abuse +2 rate up rate down Reply

Major ticket items remove tons of cash from the rest of the stagnant economy. What gets spent on cars and trucks makes the rest of the US economy suffer. The economy can't have it's cake and eat it too, when it comes to committing the household income on vehicles.

November 02 2010 at 8:00 AM Report abuse rate up rate down Reply