Automakers disappoint with modest October gains
The Detroit manufacturers did not meet the high sales expectations analysts had set for the month, but Japanese carmakers beat estimates.
Some U.S. automakers posted weaker sales gains than expected for October, adding to concerns that the industry's slow recovery could falter.
But even as Detroit disappointed analysts, the overall industry performed at about the level expected for October. The seasonally adjusted annual rate for light vehicles came in at 13.3 million units, according to industry tracking firm Autodata. That's up from 12.2 million in the year-ago period, and up from 13.1 million in September.
Forecasters were expecting a seasonally adjusted annual rate of 13.2 million to 13.4 million vehicles. Total industry unit deliveries rose 7.5% from October of 2010.
General Motors (GM) reported a meager 1.9% sales gain to 186,895 -- far below the 6.6% increase analysts were expecting. Shares of the company closed down nearly 10% Tuesday to $23.33.
Ford (F) just missed expectations with a 6.2% increase in sales to 167,502. Analysts were looking for a 6.6% gain. Shares fell more than 5% to close at $11.08.
And even Chrysler's 27% sales jump to 114,512 couldn't meet the 28% leap analysts had expected.
Auto stocks -- already on shaky ground -- were battered further by new economic concerns as the Greek government inched closer to collapse.
"We don't have a strong recovery to begin with and the last thing it needs is a couple of body blows," the chief economist at insurer Nationwide told Reuters. "Every time this industry starts to feel better about itself, you kind of look at the world around and gulp."
The industry is dealing with a few discordant trends. On one hand, consumer confidence is at rock-bottom levels, which would normally indicate low auto sales. But on the other hand, people have been putting off car purchases for so long that the return to dealership lots is inevitable.
Add to that the still-lingering supply disruptions from the March earthquakes and tsunami in Japan. The result is a sector that is still unpredictable and especially sensitive to economic twists and turns.
Another troubling point for GM was that three of its four brands saw sales decreases from a year earlier. Only its Chevrolet brand reported a positive gain of 6%, while GMC, Buick and Cadillac saw sales drop.
Many automakers reported increases in sales of trucks -- a good sign for the economy, since many small businesses and construction-related companies buy trucks. GM said its truck sales rose 2% while crossover sales fell by 1%. Ford said sales of its F-Series pickups jumped 7.1%.
Japanese automakers may have turned a corner in October, reporting sales that handily beat what analysts were expecting.
Toyota (TM) said its October sales fell by 4.3% to 134,046 units -- a lighter blow than the drop of 9.1% that analysts expected to see. Sales of Toyota-brand passenger cars were flat, while sales of Toyota light trucks fell 6.7%. The company's ADR shares closed down more than 2% to $65.26.
Honda (HMC) sales rose 3.3% to 98,333 for October -- a surprise to analysts who had generally expected a decrease of 2.5%. The company's trucks division performed especially well, with a 12.3% gain fueled by sales of the Pilot, CR-V and Odyssey. "As dealer inventories continued to replenish in October, we saw increased momentum over last month’s sales," said executive John Mendel.
Nissan said its October sales rose 18% to 75,484 units sold -- a new record for the month and higher than the 16% gain expected by analysts.
Hyundai (HYMTF) saw a 23% sales jump to 52,402, and said its year-to-date figures have already beat the full-year sales record of 538,228 it set last year. "The overall sales environment appears to be stabilizing, despite continued fluctuations in traditional economic indicators, and we believe those market dynamics position Hyundai well to finish the year on a strong note," Hyundai executive Dave Zuchowski said in a statement.
Kia (KIMTF) also set an October record with a 21% gain in sales to 37,690. Kia has sold more than 400,000 units year to date -- a first for the company.
Mercedes-Benz also set an October record with a 28% increase to 24,449 vehicles. The company also said its year-to-date figures have surpassed its 2010 sales.
Big boys get upset when little people might get to vote on something important. Looks like the big boys in Germany are running the show, sure not the German people, they would like to have Greece off their back. Little boys are always the ones that pay the bills. German people know that better than anyone, start paying other's bills and inflation is here.
US been paying other's bills and inflation has taken everything, thought Germany might avoid inflation.
WASN'T IT ALL GOING OOOOOOOOH SO SMOOOTH A MONTH AGO; wonder if any of that 100 billion or so department of energy fund money was helpful?? just sayin!
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
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