September auto sales disappoint

NEW YORK (CNNMoney.com) -- U.S. auto sales were soft in September, with results ranging from a jump at Honda Motor to a steep drop at Ford Motor.

Industrywide sales appeared poised to fall 3 to 4 percent from a year earlier, with some of the smaller import brands yet to report late Tuesday afternoon. That was roughly in line with the forecast for soft industry sales.

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"There are definite headwinds," said Tom Libby, senior director of industry analysis for J.D. Power. "Housing is a definite headwind; problems in subprime mortgages are a headwind; and you've got GM and Ford making a conscious effort to reduce incentives and reduce fleet sales."

General Motors (Charts, Fortune 500), which weathered a two-day strike by the United Auto Workers union during the month without much of a disruption in sales, saw its overall sales of cars and light trucks edge up 0.3 percent in September. When adjusted for one fewer sales day this year, the company saw its daily sales rate climb 4 percent.

Light trucks, which include pickups, SUVs and so-called crossover vehicles, posted a solid 3.6 percent gain in absolute sales, which equates to nearly an 8 percent rise in its daily sales rate.

Still, Libby said it was notable that GM, the No. 1 U.S. automaker, posted even a modest gain the face of a soft market.

Chrysler, the U.S. automaker spun off from German automaker DaimlerChrysler (Charts) in August, saw sales slip 5.4 percent from its comparable operations a year earlier. Chrysler said that much of the decline was due to its decision to also trim less-profitable fleet sales to business, especially rental car companies.

"With the overall industry down versus September 2006, Chrysler retail sales remain strong," said Darryl Jackson, Chrysler's vice president of U.S. sales.

Toyota (Charts), which last month moved past Ford Motor to become the No. 2 automaker in terms of U.S. sales, saw its sales fall 4 percent from year ago levels as it posted a narrow decline in its daily sales rate. That result contrasted with Japanese rivals Honda Motor (Charts), where sales jumped 9.4 percent, and Nissan (Charts), which saw sales go up 6.7 percent.

On the other extreme, Ford Motor (Charts, Fortune 500) saw sales plummet more than 20 percent in September, as the embattled U.S. automaker continues to lose market share.

The company saw sales of light trucks, fall 9 percent, while the sale of car models plunged 38.9 percent. The decline was widespread across its brand, with only Lincoln and Land Rover posting a sales gain.

Even with the decline in sales at Toyota, the Japanese automaker stayed ahead of Ford's weak sales results.

Industry officials agreed that it was a weak month, and most weren't forecasting a rebound in sales the rest of this year. But they are still anticipating respectable full-year sales of a bit over 16 million vehicles.

"Under the circumstances, I think the industry parred a difficult hole in September, even though it was below trend," said George Pipas, Ford's director of sales analysis, although he conceded that as far as Ford's sales went, "I don't think we were quite up to par."

Pipas also pointed to the company's decision to cut sales to rental car companies, saying Ford now would reduce those sales more than expected. And he said the company was pleased by the sales of its crossover models, such as the Ford Edge. Crossover is the industry name for the car-like SUVs that are becoming increasingly popular with buyers.

"While we might have bogeyed the hole, we did hit a few good shots along the way," Pipas said, continuing his golfing analogy.

But Libby said much of the gain in sales in crossover units is coming at the expense of sales that in the past would have gone to the SUV segment.

"There's a lot of cannibalization of existing products," said Libby. "The Edge is doing well. They needed that. If they didn't have it, those buyers would have gone someplace else."