It certainly wasn't a bad month, at least from an industrywide perspective: U.S. car and truck sales were up 7.5% in October over year-ago totals, giving the auto industry its best U.S. sales rate since February.
But those results fell short of some analyst estimates, which had suggested that October could be the best month for autos since 2009. And experts -- including those at automakers -- are now warning that monthly sales gains are likely to be more modest as we head into 2012.
But some automakers have been able to make hay in this less-than-sunny environment -- while others have continued to struggle.
Toyota and Honda: Troubles linger
It didn't work out that way. Toyota's U.S. sales were down 7.9% from year-ago totals, a drop that executives blamed in part on a lower-than-expected supply of Corollas. That beat some analysts' estimates but had to be deflating given the expectations set by Toyota's managers. A TrueCar analyst speaking to Bloomberg said that Toyota's (and Honda's) sales pace had been strong until the last week of the month, when churning stock markets and a surprise East Coast snowstorm may have contributed to a sales slowdown.
That sales slowdown didn't hurt key rivals Nissan (OTC: NSANY) and Hyundai (OTC: HYMTF), which saw sales rise 18% and 23%, respectively. Nissan has done a good job of taking advantage of its Japanese rivals' production issues, as has Hyundai -- where strong new products have driven significant U.S. sales gains in recent months.
Those gains may continue. Toyota and Honda may well continue to struggle with U.S. inventory, thanks to disruptions caused by widespread flooding in Thailand. Already the floods have disrupted both automakers' supplies of critical electronic components, forcing both to curb production in the U.S. and elsewhere, and Honda has warned its dealers that the disruptions could continue for several months.
A mixed bag for Detroit
Ford may have lost some ground in car sales in recent months as supplies of its white-hot Focus compact were constrained by early production issues, but the company said last week that those issues had been largely resolved. The Focus and its smaller sibling Fiesta continue to sell well for Ford, but a shift in buyer preferences back toward larger cars -- and greater supplies of Toyota's Corolla -- may dent their effect on Ford's sales totals over time.
Ford's aggressive new-product cadence is continuing, with all-new versions of the midsized Fusion and popular Escape SUV due soon. Assuming that both are up to Ford's recent (very) high product standards, both should help draw showroom traffic and sales for the Blue Oval.
Meanwhile, sales were almost flat for General Motors
A cautious outlook going forward
Overall sales totals in the next few months are unlikely to grow much from here, though individual automakers (Toyota, for example) could post sizable gains. GM CEO Dan Akerson has already expressed concern about the prospects for auto sales in 2012. But his counterpart at Ford, Alan Mulally, recently took a somewhat more optimistic view, saying that he expected "moderate" growth around the world in 2012.
Assuming that Europe avoids an economic meltdown, Mulally's expectation is probably reasonable. Edmunds' ace economist Lacey Plache expects U.S. auto sales to total about 13.5 million in 2012, an incremental increase over expectations for this year. Plache expects continued low interest rates, somewhat looser credit, and continued "pent-up demand" from consumers who haven't bought a new car since before the recession started to contribute to gains, but warns that continued economic sluggishness is likely to keep those gains muted.
Similar stories are likely to play out in other global markets, even China, where an expected slowdown could be a net boon, leading to a more sustainable long-term growth rate. It could be a lot worse: The major automakers have proven that they can now generate good profits even in this subdued sales environment. But even as the worst of the economic crisis continues to fade in the rearview mirror, it's clear that the long-hoped-for return to pre-crisis auto sales rates isn't happening anytime soon.
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