October's lackluster sales results contained surprising signs of a fundamentally healthier market.
Transaction prices rose dramatically, incentives dropped and too-tight inventories became more comfortable. Most analysts are projecting continued improvement from the dreadful sales of the past 13 months.
Average transaction prices soared $2,200 from a year ago, according to J.D. Power and Associates.
"Public demand is pulling higher content," says Ken Czubay, Ford Motor Co. sales boss. "We're not pushing it. It's clearly a pull market for our dealers."
Ford's unit sales rose 3 percent in October, and Czubay says buyers are taking more equipment, which is boosting transaction prices.
Meanwhile, incentive levels declined in October, and inventory shortages eased enough so as not to hinder future sales.
October's annual selling rate of 11.2 million was the best this year, except for the skewed cash-for-clunkers months.
"We're making progress," says Susan Docherty, General Motors' new vice president of U.S. sales. GM's October sales rose 5 percent.
Sales of just over 838,000 units last month were about the same as October 2008 sales. But October 2008 was down 32 percent from October 2007 and was the first October in more than 20 years in which sales failed to top 1 million.