U.S. auto sales pick up, but shares slip on Wall Street

Consumers streamed into dealer showrooms in October but that wasn’t enough to appease Wall Street, where auto company shares slid on worries that vehicle sales may have peaked.

The industry sold more than 1 million vehicles in the U.S. last month, a 7.5% gain from the same month last year, according to Autodata Corp. That translates into an annual sales rate of 13.3 million vehicles, one of the best levels in several years.

But sales at Ford Motor Co. and General Motors Co. were softer than expected, said Efraim Levy, an analyst at S&P Capital IQ. That spooked a market that was already reeling from Greece deciding to hold a referendum on an unpopular European plan to rescue the Greek economy. Shares of American and European automakers traded in the U.S. were particularly poor performers on a bearish day on Wall Street.

Ford sales rose 6.2% to 167,502 vehicles in October compared with a year earlier, with sport-utility vehicles including the Escape and Explorer selling briskly. Despite higher sales, Ford shares fell 60 cents, or 5.1%, to $11.08.

GM’s October sales rose 1.8% to 186,895 vehicles, but its shares dropped $2.52, or 9.8% to close at $23.33.

The modest sales figures aren’t necessarily a disaster for GM. Most of GM’s October sales were 2012 model year vehicles — it sold off 2011s faster than competitors did — and that allowed GM to get more money for its cars, said Rebecca Lindland, an analyst at research firm IHS Automotive.

“While the overall sales figure isn’t stellar, it’s important to remember that the vehicles they are selling are getting better transaction prices and therefore more revenue, which should translate into better profitability and a better balance sheet,” Lindland said.

Although the October sales reports looked good, some in the industry believe the pace isn’t sustainable. Auto sales are up 10% this year compared with the first 10 months of 2010.

The strong numbers for September and October represent shoppers who deferred their purchases earlier this year because of high prices and shortages caused by Japanese earthquake production disruptions that reached across the globe, said Jeremy Anwyl, chief executive of auto information company Edmunds.com.

That deferred the sales of about 200,000 vehicles, and now the industry is playing catch-up, he said.

“Depending on pricing and availability through December, most of this should play itself out by year-end,” Anwyl said. “This suggests we should view sales in October with a degree of caution. The performance over the past few months is not the start of a trend. It is more of a mini-bubble.”

Others believe the industry has some strength as it heads toward the end of the year.

“We expect the industry will be approaching 13 million in terms of absolute sales for the year,” said Jonathan Browning, chief executive of Volkswagen Group of America. “The momentum is there.”

Volkswagen had a particularly good October. Volkswagen brand sales rose 39.6% to 28,028 vehicles, its best October since 2001.

Ford also has a rosy outlook.

“I think the evidence of September and October is that there is a strong foundation in the U.S.-based automobile industry,” said Ken Czubay, Ford’s vice president of U.S. marketing and sales. “Consumers are just saying it’s time to get a new vehicle — we’re seeing that more and more every day from our dealers.”

Of the domestic automakers, Chrysler Group had the best month. Its sales rose 27% to 114,512 vehicles.

The biggest Japanese automakers continue to have trouble in the U.S. market. They have been losing market share for much of this year.

Toyota Motor Corp.’s U.S. sales in October fell 7.9% to 134,046 vehicles, Autodata said, while Honda Motor Co.’s sales last month declined 0.5% to 98,333 vehicles. But Nissan Motor Co.’s sales rose 18.0% to 82,346 vehicles in the U.S. It was less affected by the earthquake.

jerry.hirsch@latimes.com