Saturn Outlook Forum banner
1 - 1 of 1 Posts

Premium Member
322 Posts
Discussion Starter · #1 ·
Oct. 31 (Bloomberg) -- General Motors Corp., the world's largest automaker, probably increased U.S. sales of cars and trucks in October, marking three straight months of gains for the first time since 2004.

Sales for GM may have risen 2.1 percent, while Ford Motor Co.'s fell 16 percent and Chrysler LLC's slid 7.9 percent, based on the average estimates of eight analysts in a Bloomberg survey. Toyota Motor Corp. may report a fourth straight drop, its longest such streak in four years. The automakers report October sales tomorrow.

Discounts on Chevrolet Silverado pickups and demand for new sport-utility vehicles including the GMC Acadia probably helped Detroit-based GM outpace the industry in light-truck sales, as it did in August and September.

``Trucks have definitely been supporting their sales recently,'' said Chris Hopson, an analyst at forecasting firm Global Insight Inc. in Lexington, Massachusetts.

Tomorrow's sales results will be the first since GM and Chrysler workers approved four-year labor contracts designed to help U.S.-based carmakers restore profit and close a wage gap with Japanese rivals. The deals trim pay for newly hired workers and shift retiree health-care obligations to a union-run fund.

GM posted two quarterly profits this year after a $1.98 billion loss in 2006, while Ford had its first profit in two years in the second quarter. Honda Motor Co. last week reported a 63 percent increase in profit for the period that ended Sept. 30. Analysts expect Toyota to post net income of 439 billion yen ($3.8 billion) for the quarter when it announces results Nov. 7. Ford and GM may also release earnings next week.

Annual Rate

The industry's annualized sales rate for October probably fell to 16.1 million cars and light trucks, the average estimate of nine analysts and 29 economists surveyed by Bloomberg. The October 2006 rate was 16.3 million.

GM's light-truck sales rose a combined 10 percent in August and September, compared with an increase of less than 1 percent industrywide, according to Autodata Corp., a research company in Woodcliff Lake, New Jersey.

While Ford and Chrysler also offered discounts on light trucks, GM has updated its pickup line more recently than its rivals. GM's new SUVs are so-called crossovers that blend car and light-truck features and are appealing to fuel-conscious buyers.

``GM is now a significant player in the midsized crossover utility segment,'' with the Acadia, Saturn Outlook and Buick Enclave, said Michael Robinet, a forecaster with CSM Worldwide Inc. in Northville, Michigan. ``It's a growing segment, and GM needed to have a strong entry.''

Toyota's Cars

Toyota, challenging GM's global sales lead, relies more on cars in the U.S. and hasn't had a gain in that segment since June. Pickups, SUVs and minivans account for at least 60 percent of U.S. sales for GM, Chrysler and Ford. At Toyota and Honda, these light trucks account for about 42 percent.

Ford and GM's U.S. market share fell this year through September from a year earlier, and Chrysler's was unchanged. GM's share was 23.8 percent, compared with 16 percent for Ford and 12.8 percent for Chrysler, according to Autodata.

GM pulled ahead of Toyota in worldwide sales through three quarters on gains outside North America, after falling behind in the first half.

The U.S. automaker in October benefited from ``a strong month'' for large pickups such as the Silverado and GMC Sierra, ``which may have come at the expense of Ford and Chrysler,'' Robert Barry, a Goldman Sachs analyst in New York, wrote in an Oct. 28 note.

Longest Since 2004

A third monthly gain in sales would be GM's longest such streak since a five-month period through May 2004.

GM may have trouble maintaining its momentum, Barry said. ``Robust pickup sales will be hard to sustain given the backdrop of weak housing and new Chrysler and Ford product in 2008,'' he said.

Ford may report an 18 percent decline for October as sales of the Taurus and Mercury Sable sedans ``continue to lag'' even with recently increased incentives, said Peter Nesvold, a Bear Stearns analyst in New York, in an Oct. 29 note.

The Dearborn, Michigan-based automaker also has been hurt by falling sales of F-Series pickups, which make up about a fourth of its total. F-Series sales slid 13 percent through September.

Chrysler's October sales probably fell 2 percent because of a 6 percent decline for light trucks, said Richard Kwas, a Wachovia Capital Markets analyst in Baltimore, in an Oct. 26 note. The Auburn Hills, Michigan-based company relies on trucks for three-quarters of its sales, the most among major automakers.

Toyota Outlook

Toyota may report an October drop of as much as 3 percent, compared with a strong month a year earlier, Jairam Nathan, a New York-based Banc of America analyst, said in an Oct. 29 note.

A fourth monthly decline for the Toyota City, Japan-based company would be its longest period of lower sales since a six- month drop through February 2003. Toyota still has pulled ahead of Ford this year for the No. 2 spot in U.S. sales.

Honda may report an increase of as much as 3 percent for October, led by sales of its new Accord sedans, Civic small cars and Fit subcompacts, Nathan said.

This month had 26 selling days, one more than October 2006. The analysts' estimates for GM, Ford and Chrysler adjust for the difference. Bloomberg and some automakers use unadjusted percentage comparisons, which would be about 4 points higher.

In September, GM sales rose less than 1 percent from a year earlier, while Ford's fell 20 percent and Chrysler's declined 5.4 percent. Toyota's dropped 4.4 percent and Honda's increased 9.4 percent. The industrywide total slid 2.9 percent.

GM Shares

GM rose 97 cents to $39.19 at 4:21 p.m. in New York Stock Exchange composite trading, and Ford gained 7 cents to $8.87. Toyota's shares rose 2.5 percent to 6,570 yen in Tokyo today.

GM's 8.375 percent note due July 2033 rose 0.75 cent to 91.25 cents on the dollar, yielding 9.27 percent, according to Trace, the NASD's bond-price reporting service. Ford's 7.45 percent note due July 2031 gained 1.06 cents to 79.94 cents on the dollar, yielding 9.61 percent, according to Trace.

Credit-default swaps on GM debt fell 13 basis points to 513 basis points, according to CMA Datavision in New York. Ford's declined 19 basis points to 621 basis points.

The contracts are designed to protect bondholders against default. A decline in the price indicates a rise in the perception of a company's credit quality.

The following table provides estimates for car and light- truck sales in the U.S. Estimates for companies are percentage changes from October 2006. Forecasts for the seasonally adjusted annual rate, or SAAR, are in millions of vehicles.

The SAAR average is based on forecasts from nine analysts and a survey of 29 economists. The analysts' estimates are based on daily selling rates and are adjusted to account for this month having 26 selling days, one more than October 2006.
Analyst                   GM     Ford     Chrysler    SAAR

Rod Lache                 6%      -6%       -4%       16.3
 (Deutsche Bank)
Richard Kwas            1.5%     -18%       -2%       16.2
Jesse Toprak            1.3%   -18.9%     -8.2%       N/A
Robert Barry              2%     -17%      -11%       16.1
 (Goldman Sachs)
Himanshu Patel           -1%     -13%      -10%       15.9
Jairam Nathan             3%     -16%      -11%       16.1
 (Banc of America)
Chris Ceraso              4%*    -17%*      -9%*      16.3*
 (Credit Suisse)
Peter Nesvold           0.0%     -18%       -8%       16.0
 (Bear Stearns)
Paul Ballew              N/A      N/A       N/A       16.0
 (General Motors)
Chris Hopson             N/A      N/A       N/A       16.1
 (Global Insight)

Bloomberg Economists     N/A      N/A       N/A       16.0
(average estimate)

AVERAGE:                 2.1%    -15.5%     -7.9%     16.1

*Estimate presented as a range. Figure shown here is an average
of the range, rounded to the nearest tenth where appropriate.
1 - 1 of 1 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.