U.S. auto sales ran at an annualized rate of 10.5 million in October.
That may not impress you if you remember that annual U.S.auto sales ran at 16 million units for nine straight years ending in 2007. That string came to an end in 2008 when auto sales ran at a 13.2 million units. The forecast for 2009 is an even grimmer 10 million units.
But the October’s number is a huge piece of good news if you are looking for signs that the U.S. recovery from recession is actually going to produce real growth.
In September the auto industry reported sales at an annualized 9.2 million units.
That was a troubling number because it suggested that the jump in sales in July and August had been a temporary improvement due to the government’s $4,500 subsidy to car buyers through the cash for clunkers program. In July sales ran at an annualized rate of 12.7 million thanks to cash for clunkers.
In fact, the September number suggested, the increase in sales in July and August might have even been borrowed from future sales. Rather than leading to new sales, cash for clunkers might have simply pushed people who would have bought a car anyway into buying sooner. If that was the case, the July and August improvement might be a precursor of lower sales in the rest of 2009.
The October numbers haven ‘t laid that worry to rest, but they pushed it down the list.
October is the first month since December 2008 to see the annualized rate of sales top 10 million units–without the push of a government subsidy.
And the 10 million units in sales for October suggests that the auto industry might even be on the mend rather than looking at a further downturn.
The October numbers are even more positive for two of the three major U.S. automakers. General Motors (GM) saw sales climb 5% in October 2009 from the depressed levels of October 2008. Ford Motor (F) saw a 3% year over year increase. (Chrysler saw a 30% decline.)
The performance by GM and Ford looks especially promising given a flat October for Toyota Motor (TM) and Honda Motor (HMC).
October doesn’t prove that U.S. auto sales are in a major upswing, but I think the numbers do show that the worst fears about another downturn for the industry are, for the moment, overblown.