Detroit Free Press: Bombing Won't Bomb Auto Sales

Detroit Free Press said that Sunday afternoon's air strikes on Afghanistan were so anticipated by consumers they shouldn't derail what started out as a strong October for auto sales, said hopeful auto industry officials and analysts.

"Any American who didn't see this coming was from another planet. People saw it on the horizon, and it shouldn't impact auto sales any more than they were already impacted by the terrorist attacks," said David Healy, auto analyst for Burnham Securities.

For the first six days of October, autos were selling at an annual pace of more than 17 million, well above industry or Wall Street expectations. Industry analysts expect roughly 16.25 million cars and light trucks will be sold in the United States this year.

In the aftermath of the Sept. 11 terrorist attacks, zero-percent financing and other incentives offered by major U.S. automakers were bringing buyers back into showrooms. The bet -- and the hope -- of auto-industry officials, is that Sunday's air strikes by U.S. and British forces on military sites inside Afghanistan won't slow the rebound.

"I don't think these attacks come as a surprise to anyone in the United States. It was a question of when and not if," said George Pipas, Ford sales analysis manager. "Of course, it certainly doesn't lift consumer confidence. But I think a lot of people had already factored a long war into their thinking."

Automakers contacted Sunday said they had increased security, but said they planned to operate as usual despite the military strikes.

The days since Sept. 11 have been tricky for Pipas and others like him, who gauge and forecast consumer demand for new cars and trucks.

"We won't know how this patient, the economy, is doing for a while longer. A big question is whether there will be any retaliation by terrorists. That's a big uncertainty," said Pipas.

September auto sales were down, but not as much as predicted. The month finished with a respectable annual sales pace of 15.8 million, helped by strong sales in the last week of the month.

Sales were holding strong through the first week of October, with some analysts projecting the pace to top 17.2 million, making October the best sales month of 2001. The thought among industry officials, who admittedly want to see sales hold strong, was that sales may drop slightly today or Tuesday, but will rebound quickly.

"There's no economic model for all of this, but this was no surprise to Americans," said GM spokesman Tony Cervone. "We hope that with the incentives we've got out there, people will keep on buying."