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Auto sales in high gear
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November 4, 1998: 4:27 p.m. ET
Auto companies post gains in October sales, express optimism for '99
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DETROIT (CNNfn) - The 1999 model year got off to a roaring start in October as lower interest rates and a healthy economy continued to drive consumers to the showroom.
General Motors Corp., the world's largest automaker, and rival Ford Motor Co. both reported healthy increases in car and truck sales Wednesday, one day after Chrysler Corp. reported record October sales.
October traditionally marks the start of the new model year.
Industry analysts said the strong sales figures for October should bode well for the auto industry overall and Detroit's Big Three car companies.
"October was even better than I expected," said David Healy, automobile analyst at Burnham Securities. "Cars are cheaper, GM is back from the strike, and despite what's happening in the stock market, consumer confidence levels are high."
Healy, noting that trucks accounted for nearly half the sales last month, also attributed the strong market to high employment, low interest rates and easier financing.
"The numbers are not surprising," said analyst James Kelleher of Argus Research Corp., "given interest rates, a still strong economy in North America and a spate of new vehicles, particularly trucks. And it's just a very competitive market place."
GM sales up more than 6 percent
GM (GM) sold a total of 411,156 cars and trucks in October, an increase of more than 6 percent compared with the year-ago period. Truck sales jumped 6.4 percent and car sales surged 6.3 percent as the automaker continued to rebound from a devastating 54-day strike last summer.
"We expect the strong economy to continue for the foreseeable future," Roy Roberts, vice president and group executive of GM North American Vehicle Sales, Service and Marketing, said in a statement, "so we're building 1 1/2 million vehicles in the fourth quarter, more vehicles than we've built in any fourth quarter since 1988."
GM's stock was up 2-1/4 to 67 by the end of trading.
Ford (F) reported truck sales rose 9 percent to 207,559 -- the sixth consecutive month of record truck sales.
Car sales came in at 130,781, down 8 percent. October sales of passenger cars to daily rental and other fleet customers dropped 34 percent from a year ago. Company officials said Ford is reducing sales to daily rental customers because that sector tends to be the least profitable.
"October was the seventh month in a row of higher Ford sales to individual retail customers," said Bob Rewey, Ford group vice president of marketing, sales, and service. "This October, over 50 percent of our retail car sales were 1999 models. That is much higher than last October's mix of new models, which was 34 percent."
By the end of trading, Ford stock was up 1 to 54-1/4.
In addition to the Big Three, Asian automakers posted a 13 percent gain, and European sales increased 28 percent. European automakers have posted double-digit gains every month this year, led by the resurgence of Germany's Volkswagen, Audi and Mercedes-Benz.
-- staff and wire reports
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