DETROIT -- U.S. auto sales -- helped by big gains at Chrysler, Nissan and General Motors -- overcame widespread economic jitters to rise 10 percent in September, raising hopes the industry's recovery will accelerate in coming months.
It was the biggest increase in light vehicle sales since April, when surging gas prices and Japan's earthquake started to put a dent in demand.
The seasonally adjusted annual selling rate last month – 13.1 million units -- was the best since a similar rate in April, and up from an annual rate of 11.8 million in September 2010.
U.S. light vehicle sales are up 10 percent for the year through September to 9.5 million units.
Chrysler Group set the pace with sales jumping 27 percent last month, while Nissan Motor Corp. had a 25 percent gain and GM generated a 20 percent increase.
Ford Motor Co. said its September sales climbed 9 percent, with strong demand for SUVs and trucks offsetting a 9 percent drop in car sales.
But lingering shortages from the March earthquake in Japan continued to hamper several automakers, with Toyota Motor Corp. down 17.5 percent, Honda Motor Co. sales down 8 percent and Subaru off 2 percent.
J.D. Power and Associates said September marked the first time that new-vehicle retail sales remained strong throughout a month since the encouraging start to 2011.
The seasonally adjusted annualized rate for September retail sales is expected to come in at 10.3 million units, up significantly from a rate of 9.6 million units in August, J.D. Power said. Final retail figures will be available on Tuesday, J.D. Power said.
Chrysler said retail sales rose 50 percent last month, and GM said its retail volume climbed 19 percent.
Volkswagen AG's VW brand said sales of the new Passat and Jetta helped push its September sales up 36 percent -- its biggest gain of the year. It was the 13th straight month VW brand sales have increased.
Chrysler was boosted by strong deliveries of the Ram pickup, Chrysler brand, Dodge Durango SUV and Jeep lineup. It was the 18th consecutive month Chrysler has posted a sales gain in the U.S. market.
Ram pickup demand surged 45 percent to 24,522 units.
'No double dip' at Chrysler
Chrysler's U.S. sales are up 23 percent this year through September, helping the automaker gain market share.
"Irrespective of the economy, strong products equal strong sales," said Reid Bigland, head of the Dodge brand and U.S. sales for Chrysler. "There is no double dip downturn going on around here."
GM's four brands all posted sales gains last month, led by Chevrolet, up 22 percent, and GMC, up 28 percent.
Continued strong demand for the Chevrolet Equinox and GMC Terrain crossovers helped GM last month. Equinox sales are now up 46 percent this year, and Terrain demand has jumped nearly 60 percent. The automaker plans to boost output of the crossovers at a plant in Ingersoll, Ontario, again to address ongoing shortages, The Toronto Globe and Mail reported.
GM, like Chrysler, also benefited from strong pickup demand, with sales of the Chevrolet Silverado up 36 percent and GMC Sierra sales up 26 percent.
Ford said late last month that large pickup demand would help drive the industry's overall September light vehicle sales higher.
An anemic economy, lackluster job growth, depressed consumer confidence, surging gas prices and Japan's March earthquake that crippled car and truck supplies have created one headwind after another for automakers this year.
Still, while U.S. light vehicle demand is up 10 percent through September, many automakers were counting on stronger growth. In addition to easing credit terms, pent-up demand has helped drive sales this year, analysts say.
Discounts creep back
Rising discounts are also luring consumers back to showrooms.
TrueCar.com estimates that the average incentive for light vehicles was $2,716 in September, down $24 – or 0.9 percent -- from September 2010 but up $101 – or 4 percent -- from August.
"Transaction prices have started to decline as manufacturers have started to increase incentives and inventory is coming back," said Jesse Toprak, an analyst at TrueCar.com.
While some analysts have scaled back their sales forecasts in recent months, GM said today it still expects full-year sales across the industry to top 13 million, even though sales came in below that pace from May through August.
GM said the recent drop in gasoline prices also drew consumers back to showrooms.
"For G.M., all of the factors that say this is a good time to buy a new vehicle outweigh the bad news that appears to be slowing down the broader economic recovery," said Don Johnson, GM's head of U.S. sales operations. "People have to come back to the market."
Consumers have held off on new vehicle purchases for several years during and after the recession. That has pushed the average age of a vehicle on the road today to a record 10.7 years old.
"There is plenty of pent up demand in the light vehicle marketplace," said Paul Taylor, chief economist for the National Automobile Dealers Association. "Now that an ample inventory is being restored sales should pick up more completely in the fourth quarter."
A surge in used vehicle prices is also helping boost new vehicle sales, analysts say. In some cases, new vehicles are now better deals than similar used models.
Last week, NADA guides said more than 100 used 2011 models on the market today have a retail value that exceeds the current 2011 sticker price on a new model. Some used models are valued up to 39 percent more than their original sticker price, NADA said.
The slump in new car sales over the past three years has resulted in a dearth of late-model, used vehicles. And lease returns, which dealers rely on for used car inventory, have dropped as more consumers take advantage of great prices to purchase the vehicle.
The lack of inventory from Japanese automakers and drop in late spring and summer discounts kept some consumers on the sidelines.
"Right now, the pent-up demand due to age of vehicles is what's keeping this nice, steady, slow growth going," said GM's Johnson. "Vehicle buying attitudes remain strong out there. As long as things remain relatively stable and even in the face of consistently high unemployment, we're going to continue, we believe, to see slow growth."
Car and truck supplies have already begun rebounding at Toyota and Honda – the two automakers hardest hit by the quake and tsunami.
"As vehicle inventory improves from the shortages during the past four months, buyers are showing resilience despite the troubling economic environment," said Jeff Schuster, head of forecasting at J.D. Power and Associates. "While conditions remain challenging, a robust selling rate in September will help to ease fears of weaker vehicle sales in the fourth quarter."
Mike Colias contributed to this report