Business

November sales healthy for most automakers

DETROIT — All major automakers but Toyota reported strong U.S. sales increases in November as the auto industry's slow-motion recovery continued to gain traction.

Ford, General Motors, Chrysler, Nissan, Hyundai and Honda all reported double-digit increases, and only Toyota, which has been hurt by a string of safety recalls, had a sales drop. Overall, according to Autodata Corp., U.S. sales last month rose 17 percent from November 2009, a month marked by consumer paralysis due to high unemployment.

The November performance helped an industry that is trying to recover from last year's historic lows as credit froze up and two major automakers slid through bankruptcy court. Sales started the year with promise, peaked in May as consumer confidence rose, fell off during the summer and now have started to rebound.

Industry analysts say the solid November sales numbers, combined with a strong October, show that consumers who have kept their jobs through the economic downturn are now feeling confident enough to spend money and replace older vehicles.

Bob Carter, Toyota's top U.S. sales executive, said Toyota can tell things are shifting because buyers are opting for more highly equipped SUVs, which indicates they aren't just buying because they need family transportation.

"At the beginning of the year, the vast majority of buyers were those who needed a car, versus wanted a car," he said.

Those who spent money last month also bought crossovers like the Chevrolet Equinox and Hyundai Santa Fe. Midsize cars like the Ford Fusion and Hyundai Sonata also sold well.

The increased sales likely are due to a combination of rising confidence and delayed buying as people replace vehicles they have kept for longer than normal during a severe auto industry downturn, said Bruce Clark, senior vice president of Moody's Investors Service.

"There is a degree of pent-up demand that's being met gradually by people who have kept jobs and can go out and afford to do such things," Clark said. The sales are not as robust as historic highs from the early 2000s, but they are still a good sign for the industry, Clark said.

Yingzi Su, GM's senior economist, said the stable and increasing auto sales mean that consumers with jobs are starting to spend again, the start of an upward trend for automakers and a good sign for the broader economic recovery going into next year.

Once businesses see increased consumer spending, she said, they will be more willing to hire workers, a factor that has held back the economic recovery for months.

Incentives such as sweet lease deals and rebates also helped push up sales last month. Automakers raised incentive spending about 6 percent over October to an average of $2,712 per vehicle, said website TrueCar.com.

Of the major automakers, Hyundai Motor Co. had the biggest increase, up 45 percent from the same month last year. Nissan Motor Co. sales were up 27 percent, followed by Honda Motor Co. at 21 percent and Ford Motor Co. with 20 percent. Chrysler had a 17 percent increase, while General Motors reported sales up 11 percent from November of last year.

Toyota sales dipped 3 percent, with the company blaming the drop on a 60 percent cut in sales to fleet buyers such as rental car companies.

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