U.S. Auto Industry Scores October Sales Gains

GM reported its first monthly gain in U.S. sales in almost two years while Toyota and Ford also improved, a sign the auto industry is coming back from yearlong slump.

DETROIT (AP) -- After months of roller coaster-like sales, the auto industry offered signs of recovery from its yearlong slump on Tuesday, as most automakers reported higher levels of U.S. sales in October.

GM, the largest U.S. automaker, reported its first monthly sales gain in almost two years, while Hyundai and Subaru were huge winners thanks for their popular models and fuel-efficient sedans. Other top automaker -- Toyota, Ford, Nissan -- also posted higher sales.

The mood was in contrast to a year ago, when consumers were frightened away from showrooms by the early effects of the financial meltdown, plunging stock markets and the credit freeze.

Automakers had said this October would be a test of the strength of the auto market after the volatile effects of the government's Cash for Clunkers program. The industry staggered through a tough September following the summer's clunker-fueled sales surge.

The industry still has to see its way through a number of economic challenges, said Bob Carter, a Toyota vice president. Americans remain anxious about high unemployment, while consumer confidence remains dampened.

"We expect the recovery to be very gradual, extending into next year and beyond," he said.

Demand for new cars and crossovers fueled the better October sales for General Motors Co. and Detroit rival Ford Motor Co.

GM's sales rose 4.7 percent, while Ford notched a 3-percent gain. Japanese rival Toyota Motor Corp. said its sales edged up less than a percent. Less rosy news came from Chrysler Group LLC, whose sales fell 30 percent, though they improved from September.

Ford's top economist Emily Kolinski Morris said last month's sales signal a real underlying demand for new vehicles after the distorting impact of the clunkers program. The economy, she said, is "in transition from recession to recovery."

"We expect consumers to remain cautious as the recovery continues," she told analysts and reporters during a conference call.

Hyundai, based in South Korea, said its sales jumped 49 percent, boosted by its fuel-efficient Elantra sedan. Japanese automaker Subaru also topped the winner's list with a 41-percent surge, helped by strong sales in its Outback and Forester models.

Ford's sales got a boost from new product launches and it gained U.S. market share for the 12th time in 13 months. Its critically acclaimed vehicles continue to grab buyers from rivals. Ford has also benefited from consumer goodwill because it didn't take government bailout money or go into bankruptcy, as General Motors Chrysler did.

Fuel-efficient models like the Ford Fusion sedan and Escape small sport utility vehicle sold well, with both notching sales jumps of around 25 percent. Ford's overall car sales rose 11 percent over last October, while crossovers climbed 23 percent.

More than 80 percent of Ford's sales last month came from 2010 models, which also helped the company lower its incentives.

That was in line with the industry, which spent less to give car buyers big rebates. Automakers focused on clearing out old inventory and on selling 2010 models, which are not discounted as heavily.

Susan Docherty, GM's new sales chief, acknowledged that it led the industry in spending on rebates, low-interest financing and other incentives in October. Edmunds estimates GM spent $4,277 per vehicle sold versus the industry average.

The company spent more as it phases out the Pontiac and Saturn brands, and because it had a high number of 2009 models left in its inventory, Docherty said.

Chrysler, the maker of the Chrysler, Dodge, Jeep and Ram truck brands sold 65,803 vehicles last month, up 6 percent from September. That was when its sales slumped because dealerships could offer few popular models. The automaker, which is announcing a new product strategy on Wednesday, is aiming to show steady improvement from month to month.

Looking to boost November sales, Chrysler will offer a slew of new incentive programs this week.

Honda's U.S. sales edged lower, weighed by a big drop in sales of its popular Civic car.

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