After an October in which vehicle sales ranged from lukewarm (several import brands) to ice cold (General Motors and Ford Motor Co.), automakers are expecting to end up 2005 just about where they thought they'd be several months ago.
Meanwhile, Ford is expected to cut production in the fourth quarter and next year, while many transplants continue to crank up output. Al Giombetti, Ford vice president of sales, calls October "nothing to be happy about." But other automakers are looking at a strong year overall.
In the aggregate, the industry will increase North American production through the first quarter of next year.
As October wore on, sales at GM and Ford picked up a bit from the catastrophic start of the first month since the end of the employee-pricing blowout sales of the summer. The companies returned to more normal sales incentives as they try to move to lower everyday prices.
Some GM dealers have seen a slight pickup in sales because of stable fuel prices, a new lease pull-ahead program that runs through April 30 and other leasing incentives.
"This weekend (starting Oct. 22) was the first one that was average or better," Leo Bunnin, president of The Bunnin GM Super Center in Oxnard, Calif., told Automotive News. He sells Buick, Pontiac, GMC, Cadillac and Saturn.
Bunnin says GM introduced strong lease offers, such as a GMC Envoy for $279 a month for 36 months and a Buick LaCrosse for $249 a month.
Most projections show the U.S. industry heading toward a healthy sales year of nearly 17 million light vehicles.
Automakers are poised to push North American vehicle production up in the fourth quarter and first quarter of 2006. GM will build 1.3 million cars in the fourth quarter, spokesman Dan Flores told Automotive News, up from about 1.2 million in the same quarter of last year.
Overall, North American production will hit 3.89 million units in the fourth quarter, up 2.4 percent, according to projections compiled by CSM Worldwide Inc., of Farmington Hills, Mich.
CSM projects that automakers produce 4.14 million units in the first quarter of 2006, up 4.1 percent over this year's first quarter.
Chuck Schifsky, spokesman for American Honda Motor Co., told Automotive News that Honda and Acura sales are likely to end October flat. But he adds, "The sales goal for American Honda for 2005 is 1.4 million vehicles, and we are currently on track to meet this number."
Jed Connelly, senior vice president of Nissan USA, said in an e-mail that Nissan expects combined full-year sales for Nissan and Infiniti to hit 1.09 million, a 10 percent increase for the year. And it expects total light-vehicle sales to hit 16.9 million units.
In a research note last week, analysts Robert Barry and Patrick Archambault of Goldman Sachs projected 17 million U.S. light-vehicle sales for the year despite the dismal 14.9 million seasonally adjusted annualized selling rate in October.
U.S. automakers are in part restoring inventories depleted by summer employee-discount sales. Merrill Lynch automotive analyst John Casesa predicted in a research note last week that GM would increase its inventory by 120,000 units in October, with its Nov. 1 levels at about 919,000 units, or 11 percent below average for this time of year.
Casesa says Ford will add 60,000 units of inventory to hit 720,000 by Nov. 1, about 6 percent above average.
'Pretty tough' October
Hyundai Motor America CEO Bob Cosmai told Automotive News that Hyundai is using a "pretty tough" October to replenish inventory: "We are trying to catch up with some of our inventory. Our Accent and Elantra are down to 24 days supply. We are trying to get some increased shipments, especially on the East Coast."
Automakers have refrained from trying to pump up sales with heavy incentives. After the summer employee-pricing blowout by the U.S. Big 3, lease deals and small-scale incentives are more the norm.
Volkswagen of America, for instance, is offering lease deals on the 2006 Passat that went on sale in July and financing to push out the 2005 Jetta, Touareg and GTI.
Tom Carney, sales and marketing director for American Suzuki Motor Corp., told Automotive News that Suzuki is offering customer cash, 0-percent interest and lease deals.
Richard Klaben, a principal in the Klaben Auto Stores based in Kent, Ohio, says new-vehicle sales were off "substantially" since employee discounts ended. Klaben sells Chrysler, Jeep, Dodge, Ford and Lincoln Mercury.
He says domestic automakers need to turn away from incentives: "While they were screaming about the deal, they forgot about the brand."
Joe Sage, executive vice president of Universal City Nissan in Los Angeles, the largest U.S. Nissan store, says Nissan has been "pretty aggressive with customer cash across the board. We have cash that ranges from $2,250 to $3,000 on the Titan (pickup)."
Sage says some customer cash is a must these days.
"Value priced products and no rebates is a big risk," he says. "Customers expect rebates. They won't tolerate that big of a change."
Mark Rechtin, Kathy Jackson, Diana T. Kurylko, Philip Nussel, Mary Connelly, Jamie LaReau and Amy Wilson contributed to this report