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GM, Ford Top Analysts' Sales Estimates in Best Month of 2010

November 3, 2010
4 min to read


General Motors Co. and Ford Motor Co. reported U.S. sales increases that topped analysts’ estimates as consumers returned to showrooms, making October the best month for vehicle deliveries in more than a year, Bloomberg reported.


GM’s sales climbed 3.5 percent to 183,759, the Detroit- based automaker said today in a statement. Sales at Ford increased 15 percent to 157,935, the Dearborn-Mich. based company said. Five of the top six automakers by U.S. sales reported gains, and Toyota Motor Corp. had a decline.

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Industrywide light-vehicle sales rose to a 12.3 million annual rate in October, researcher Autodata Corp. said today. That’s the fastest since the U.S. government’s “cash for clunkers” incentive program lifted the pace to 14.2 million in August 2009. The average of nine analysts’ estimates compiled by Bloomberg was for the rate to reach 11.9 million last month.


“Consumers who have a job are feeling a little bit better and not fearing every Friday anymore,” said Rebecca Lindland, an analyst at researcher IHS Automotive in Lexington, Massachusetts. “They feel like the worst is over and they’re starting to trickle back into showrooms.”


GM, the largest U.S. automaker, exceeded expectations for a decline of 6.3 percent, the average of three analysts’ estimates, as customers bought more Buick and GMC brand vehicles.


Buick sales climbed 39 percent to 12,569 vehicles, led by a 53 percent increase in deliveries of the Enclave sport-utility vehicle, GM said today. GMC sales gained 30 percent to 33,136.


Ford’s gain topped the 14 percent average estimate of six analysts on record sales of Fusion sedans. Fusion sales gained 29 percent, while F-Series rose 24 percent, pushing deliveries of the pickups past last year’s total in the first 10 months of this year.

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“That’s a good harbinger of the economy starting to move forward,” Ken Czubay, Ford’s U.S. sales chief, said on a conference call with analysts. “It’s good to see the industry nudging forward.”


Ford will seek to boost Lincoln sales with more marketing through the end of the year, Czubay said. Lincoln sales rose 1.5 percent in October compared with a 21 percent increase for Ford- brand vehicles.


“Lincoln just isn’t yet playing in the big leagues with legitimate luxury cars,” said Michelle Krebs, an analyst with automotive researcher Edmunds.com. “Lincoln is in neverland right now. It needs new products.”


Ford rose 75 cents, or 5.2 percent, to $15.18 at 4 p.m. in New York Stock Exchange composite trading, the highest closing price since July 28, 2004.


“Ford has been a phenomenal winner for us,” said Frank Ingarra, co-portfolio manager at Novato, California-based Hennessy Advisors Inc., which held 407,700 Ford shares as of Sept. 30. “They were a lot more nimble than their competitors, moved a lot quicker, took out parts of the company they needed to and have reemerged.”

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The Federal Reserve said today it will buy an additional $600 billion of Treasuries through June, expanding record stimulus in an effort to boost growth and reduce unemployment. The U.S. economy expanded at a 2 percent annual rate in the third quarter, the Commerce Department reported Oct. 29. The jobless rate is projected to stay above 9 percent through next year.


“We have a recovery with a lot of weight on its back,” said Paul Ballew, chief economist for Nationwide Mutual Insurance Co. in Columbus, Ohio, and a former General Motors Corp. economist. “For vehicle sales to jump a heck of a lot more, it’s going to take stronger growth, job creation and higher levels of confidence than what we’re seeing.”


Chrysler Group LLC’s sales rose 37 percent from a year earlier to 90,137 vehicles. The automaker, based in Auburn Hills, Michigan, posted a 29 percent gain in deliveries of its namesake brand and said sales of its Jeep line more than doubled on higher demand for its redesigned Grand Cherokee SUV. Deliveries of the Ram pickup rose 41 percent to 17,316.


Chrysler was expected to report a 41 percent sales increase, the average estimate of six analysts.


“Most of what we’re seeing from Chrysler is either fleet- and rental-based or incentive-fueled sales, so it’s a bit harder to judge Chrysler,” said Jesse Toprak, vice president of industry trends at Santa Monica, California-based TrueCar.com. “We don’t expect a real recovery in their retail sales until the Fiats start rolling in next year.”

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The U.S. auto selling rate has stayed above 11 million since March, according to Autodata, based in Woodcliff Lake, New Jersey. A rate above 12 million would be “a good sign and an indication the fourth quarter will be higher,” George Pipas, Ford’s sales analyst, said yesterday in an interview.


“We feel pretty good about October for the industry overall and for GM in particular,” Don Johnson, GM’s vice president of U.S. sales, said today on a conference call.


GM today said it will raise as much as $10.6 billion in an initial public offering that will reduce the U.S. and Canadian governments’ stakes in the automaker. The company also said it had third-quarter net income attributable to common stockholders of $1.9 billion to $2.1 billion.


Toyota’s U.S. deliveries fell 4.4 percent, the only drop among the top six automakers. The decline was smaller than the 5.6 percent drop estimated by four analysts, on average. Sales of the Corolla decreased 25 percent and the Camry slipped 14 percent.

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