Automakers report gains in Sept. U.S. sales

Tuesday October 1, 12:47 pm ET

By Tom Brown

DETROIT, Oct 1, 2002; Tom Brown writing for Reuters offered this analysis of manufautures September sales data.

U.S. auto sales slowed in September from the torrid pace set over the summer, but many automakers reported strong year-over-year gains despite the struggling economy and escalating talk of war with Iraq.

Sales in September 2001 declined in the immediate aftermath of the attacks on the World Trade Center and Pentagon but rebounded after Detroit's Big Three automakers rolled out interest-free financing and other deals to help bolster demand.

Among major automakers reporting results early on Tuesday, the Chrysler side of DaimlerChrysler AG said its U.S. sales jumped 18 percent, led by a 30 percent gain in the company's core Dodge brand and an 82 increase in sales of the popular Ram pickkup truck.

Ford Motor Co.'s sales rose a modest 1.6 percent, meanwhile, excluding its foreign brands Volvo, Land Rover and Jaguar and some heavy trucks.

Zero percent loans and hefty cash rebates have helped prop up sales all year and Ford, the world's No. 2 automaker, said it was broadening the loan deals to include almost its entire lineup of 2003 model cars, trucks and sport utility vehicles.

Volkswagen AG, Europe's largest automaker, said its U.S. sales were up 9.9 percent in September from a year ago. The company said its U.S. sales fell to 264,423 vehicles in the first nine months of the year, however, from 268,788 units in the same period of 2001.

Anmong other foreign nameplates, luxury automaker BMW AG said its September sales rose 22 percent and that sales for the first nine months of the year were up 17 percent over the same period in 2001.

Auto sales, which account for about one-fifth of U.S. retail sales, have helped keep the U.S. economy rolling this year thanks to zero percent loans and "cashback" offers that have cut new cars and trucks to their most affordable level in decades.

Few analysts expected a repeat any time soon of the results seen in July and August, however, when seasonally adjusted annual sales came in at rates above 18 million vehicles, the strongest since last October's record figure.

Most analysts surveyed by Reuters see September sales dropping to an annual sales rate of no more than about 16.2 million vehicles.

There have been growing concerns about how long Detroit can keep its incentives spending going, since it cuts into wafter-thin profit margins. And there are widespread fears about slumping consumer confidence, even though a monthly survey from University of Michigan last Friday showed that spending on cars and homes still takes a priority over "nearly all other items" in the current mindset of U.S. shoppers.