September 2003 US Auto Sales Seen Slightly Better Than Last Year

CHICAGO September 25, 2003; Ann Keeton writing for Dow Jones reported that auto sales are expected to slow from August's torrid pace, as the level of buyer incentives eases. But sales could still be a little stronger than a year ago.

Analysts sees auto industry sales, to be reported Oct. 1, coming in at an annual adjusted rate of around 16.5 million to 17 million vehicles.

Industry sales last September were 16.3 million vehicles, reported at an annual adjusted rate. Last month, sales rose to an adjusted 19 million vehicles, driven by incentives designed to clear out 2003 models.

Sales at General Motors Corp., the world's largest car maker, are expected to be about 14% higher than last September, analyst Ronald Tadross at Banc of America Securities (News - Websites) wrote in a report Thursday. As well, he sees GM picking up U.S. market share, to 28.3%, compared with 25.1% last year. "GM's increase in market share and retail sales is driven by easy comps on a year ago basis, and strong truck sales," the analyst wrote.

Both Ford and Chrysler are expected show lower year-over-year sales and a falloff in market share, analysts said.

Gary Lapidus, an analyst with Goldman Sachs, sees Ford's September sales dropping by 10%, and Chrysler's sales down 13%, compared with last year. The U.S. automakers are "suffering intense competition from Toyota, Honda and Nissan," the analyst wrote. Tadross believes they'll fare a little better, with Ford's September sales down 4% compared with last year, and Chrysler's off 9%.

Based on GM's strong sales performance, the Big Three U.S. carmakers should record a U.S. market share of 59% in September, Lapidus wrote in a report Thursday. That's better than the lowest-ever monthly market share of 57.9% posted in August of this year.

All of the Big Three U.S. auto makers have continued to use generous incentives to sell 2003 models, and the new 2004 models haven't been totally immune to special deals.

Higher than normal inventories are coming down, but the number of unsold vehicles at the Big Three is still higher than last year, analysts said.

Ford's inventories at the end of September will be 30% higher than normal, Lapidus wrote, with Chrysler's inventories running 20% higher and GM's 10% higher. "We expect the Big Three inventory to be at 30% above normal at the year-end, assuming fourth quarter production schedules remain unchanged, and Oct.-Dec. adjusted sales of 16.5 million light vehicles, which is consistent with our full year sales estimate of 16.6 million light vehicles," Lapidus wrote.