Reuters: Hot Stocks: UPDATE 2-U.S. auto sales on pace for best month since November 2007

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UPDATE 2-U.S. auto sales on pace for best month since November 2007 Sep 4th 2013, 16:42 Wed Sep 4, 2013 12:42pm EDT * Toyota again beats out Ford to rank No. 2 in U.S. market * U.S. sales above 16 million vehicles were routine until 2008 * Sales robust despite lack of inventory for some automakers * Ford, GM shares both rise nearly 4 pct (Adds comments by GM economist, analyst, updates stock prices) By Bernie Woodall and Ben Klayman DETROIT, Sept 4 (Reuters) - U.S. auto sales were on a pace to show a gain as high as 17 percent in August as the industry raced toward its strongest month since just before the start of the 2007-2009 recession. Last month's sales will top 16 million vehicles on a seasonally adjusted annualized basis, several automakers said, which would be the first time U.S. sales topped that level since November 2007. General Motors Co said August auto sales were 16.3 million vehicles on a seasonally adjusted annualized basis. This would easily top the 15.8 million annualized sales rate forecast by 45 analysts surveyed by Thomson Reuters. Consumers, driving vehicles that are on average more than 11 years old, are securing cheap financing to buy new cars and trucks, said Ken Czubay, Ford Motor Co U.S. sales chief. He said automakers were aggressive in their Labor Day weekend marketing, which boosted sales for the last three days of August. GM's chief economist, Mustafa Mohatarem, said that the 16 million seasonally adjusted annualized rate is more impressive now than it was before the recession, when surpassing that milestone was routine. "The 16 million right now reflects the underlying fundamentals of the economy," Mohatarem said, adding that there were a lot of incentives, which lower the price but cost profit for manufacturers, before the recession. "This is being driven by the base demand for cars rather than trying to pull people in," he said, referring to the current environment. GM, the No. 1 seller in the U.S. market, on Wednesday reported August U.S. sales up 15 percent, and Toyota Motor Corp said sales gained 23 percent. Both automakers easily beat analyst expectations. Toyota sold 4.6 percent more vehicles in the United States than Ford in August. It was the second straight month that the Japanese automaker outsold Ford, ranking it No. 2 behind GM. Before July, Toyota had not bested Ford in monthly sales since March 2010. "The auto industry continues to be a bright spot in the economic recovery," said Bill Fay, Toyota division group vice president and general manager. Ford shares were up 3.5 percent at $16.91 and GM shares were up 3.6 percent at $35.37 on the New York Stock Exchange on Wednesday afternoon. LOOKING AHEAD Jesse Toprak, analyst with TrueCar.com, said consumers are attracted to showrooms now because of low monthly payments and "the best lease deals ever." Toprak said he expects the robust sales rate to continue through the end of 2013, and expects fourth-quarter sales to be the strongest of the year. Mohatarem of GM also said that the sales pace will not fade as the year nears an end. But Alec Gutierrez, an analyst with Kelley Blue Book, said a shortage of some key models will put a crimp in sales growth for the rest of the year into 2014. "I don't know if we're going to have the inventory available to have the same kind of growth that we saw this month," he said. Japanese automaker Nissan Motor Co also had a good U.S. sales month, showing a 22 percent increase. Monthly auto sales are viewed as an early indicator of the U.S. economy's health. The industry has held up better than the broader economy due in part to consumers' need to replace aging vehicles. Chrysler Group LLC and Ford each said their August U.S. sales rose 12 percent, and both automakers reported that pickup truck models led the way, in part due to the rising housing market. Ford's sales outstripped analyst expectations and Chrysler's matched them. Ford sales analyst Erich Merkle said the auto industry will show a 17 percent U.S. sales gain for August, and a seasonally adjusted annualized selling rate of more than 16 million vehicles. Before the 2008-2010 industry downturn, it was routine for U.S. auto sales to top 16 million vehicles each year. In a 10-year span ending in 2007, U.S. auto sales averaged 16.7 million vehicles. Pickup truck sales remained strong in August for the major U.S. automakers, continuing a trend that began almost a year ago. Ford said it sold 71,115 F-Series pickup trucks, up 22 percent, which matches the line's year-to-date gains. GM's Chevrolet Silverado pickup truck sales rose 14 percent and through August has increased its sales 25 percent. Chrysler's truck brand, Ram, showed a robust 29 percent sales gain in August, and has a gain of 25 percent through August. LMC Automotive expects this year's U.S. sales to finish at 15.6 million vehicles, which would be a 7.6 percent gain from 2012. Auto companies are making the gains as the average transaction price for a new vehicle in the United States climbed to a record $31,252 in August, said TrueCar.com. Volkswagen AG said its sales were down 1.6 percent in the month. Chrysler is a unit of Italy's Fiat SpA. (Additional reporting by Deepa Seetharaman in Detroit; editing by Gerald E. McCormick and Matthew Lewis) Link this Share this Digg this Email Reprints

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