DETROIT – Americans continued to buy new cars and trucks at a strong pace in September, drawn by cheap loans, aging cars that need to be replaced, and a new lineup of fuel-efficient midsize sedans.
Last month's sales were led by foreign-based companies. Toyota's rose 42 percent, while Volkswagen's jumped 34 percent. Detroit didn't fare as well. Chrysler reported a 12 percent increase, but General Motors and Ford sales were either up slightly or flat.
After all car companies finish reporting Tuesday, U.S. sales are expected to rise to more than 1.1 million vehicles, up 11 percent from last year. Most analysts expect an annual rate around 14.5 million.
Auto sales have been a bright spot in a cloudy economy all year, maintaining an annual pace of at least 14 million most months. On Tuesday, Chrysler's U.S. sales chief, Reid Bigland, said that September sales for the industry could reach an annualized rate of nearly 15 million, making it the best month since March of 2008.
"We remain optimistic about the health of the U.S. new vehicle sales industry and our position in it," Bigland said.
Strong sales also could affect the November election. President Obama often boasts on the campaign trail that the bailout of GM and Chrysler in 2009 helped save about 1 million jobs in the industry. Detroit's car companies run most of their factories in the Midwest, including Ohio, a key swing state. Republican Mitt Romney has said the companies should have gone through bankruptcy with private funding and allowed to recover with government-backed private loans. But it's unlikely private loans would have been available in 2009 and without government aid, the companies could have gone under.
Since the bailout, both GM and Chrysler have returned to profitability and hired thousands of new workers.
At Chrysler, the company reported its best September since 2007. Ford's sales, however, were flat compared with a year earlier, and General Motors reported only a 1.5 percent increase. Ford said big gains in small car and SUV sales were wiped out by lower truck sales. GM also reported declining truck sales, but said car sales jumped.
At GM, car sales were up 29 percent, led by the Chevy Cruze compact with a 43 percent increase. The Chevrolet Sonic subcompact saw sales rise to five times the number in September of last year. Sales of the Chevy Silverado pickup, GM's top-selling vehicle, fell almost 17 percent, as GM reported lower sales to rental companies.
One thing that will be absent from September sales is big discounts from automakers. The average incentive for the month was $2,468, down almost 7 percent from September of last year, according to the TrueCar.com auto pricing site.
There's enough good economic news to help sales, which could reach an annual rate of 15 million this month, according to Morgan Stanley analyst Adam Jonas.
Consumer confidence, one of the biggest factors influencing car-buying, jumped in September to the highest level since February. It was bolstered by a brighter outlook for overall business conditions and hiring.
Checks with dealers found higher floor traffic in mid-month "driven by aggressive lending and marketing activity, particularly for trucks," Jonas wrote in a note to investors.
Sales of 15 million would still fall short of the recent peak of around 17 million in 2005. They bottomed at a 30-year low of 10.4 million during the recession in 2009.