Business

Auto sales show industry beginning to stabilize

GM reported its first monthly gain in U.S. sales in almost two years while Toyota and Ford also improved, a sign the auto industry it starting to crawl back from a yearlong slump.

Demand for new cars and crossovers in October fueled better results for General Motors Co. and Detroit rival Ford Motor Co. GM's sales rose 4.7 percent from October 2008, while Ford notched a 3-percent gain. Japanese rival Toyota Motor Corp. said its sales edged up less than a percent. Less rosy news came from Chrysler Group LLC, whose sales fell 30 percent, though they improved from September.

The biggest winners were Hyundai, based in South Korea, whose sales jumped 49 percent to 31,005 vehicles, boosted by its fuel-efficient Elantra sedan; and Japanese automaker Subaru, which saw a 41-percent surge, helped by strong sales in its Outback and Forester models.

Automakers spent less money on consumer incentives over all in October compared with last year and September, according to Edmunds.com. The auto research Web site said 2010 models, which require fewer discounts than older model-year vehicles, made up a larger portion of vehicles sold in October.

Automakers had said October would be a test of the strength of the auto market after the volatile effects of the government's Cash for Clunkers program. The industry staggered through a tough September, hurt by the collapse of demand following the clunker rebates that fueled a sales surge over the summer.

The mood was in contrast to a year ago, when consumers were frightened away from showrooms by the early effects of the financial meltdown and credit freeze.

Ford's top economist Emily Kolinski Morris said October sales signal a real underlying demand for new vehicles after the distorting effects of the clunkers program. The economy, she said, is "in transition from recession to recovery."

Chrysler, the maker of the Chrysler, Dodge, Jeep and Ram truck brands sold 65,803 vehicles last month, up 6 percent from September. That was when its sales slumped because dealerships could offer few popular models. The automaker, which is announcing a new product strategy on Wednesday, is aiming to show steady improvement from month to month.

Looking to boost November sales, Chrysler will offer a slew of new incentive programs this week. The carmaker will offer 0 percent financing for up to 48 months on all its vehicles, and a no-cost maintenance and service program on its Jeep and Chrysler brands. Buyers also can opt for $2,500 off their purchase if they don't take the no-interest financing. The deals begin Wednesday and run until Nov. 30.

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