Analysts: October Auto Sales Picked Up Speed

U.S. auto sales appear to have gathered pace in October, buoyed by a rise in the availability of car loans, The Detroit News reported.

Auto analysts say the selling rate may have risen to its highest level this year. Estimates for the closely watched seasonally adjusted annual sales rate range from 11.8 million to 12.3 million cars and light trucks, up from 11.76 million in September.

"We're seeing younger buyers come in," said Jeffrey Schuster, forecasting director at J.D. Power and Associates. "Some of that has to do with credit availability."

According to Bandon, Ore.-based CNW Research, the proportion of new car buyers with subprime or near-subprime credit scores rose to 10.46 percent in September, from less than 8 percent at the start of the year.

CNW said it expected lenders to gradually ease credit further, allowing owners of aging vehicles to come back into the market.

Compared with last October, auto sales are expected to be up around 10 percent to 11 percent. But industry executives and analysts pay closer attention now to the sequential trend, to gauge the strength of the economic recovery.

The auto market has grown less this year than forecast because of the grim jobs outlook and weak housing markets. Most forecasters and automakers have pared their full-year sales estimates to 11.5 million cars and light trucks, up from 10.4 million last year.

CNW President Art Spinella projects the selling rate for October at 12.3 million light vehicles, while auto research firm Edmunds.com puts it at 12.2 million.

"It seems we are significantly out of the range that we've been in all year," said Edmunds President Jeremy Anwyl. "It's suggestive that consumers are feeling enough confidence to buy a car."

Pricing firm TrueCar.com projects a 12 million rate, while investment firm Bank of America-Merrill Lynch and forecaster J.D. Power estimate the selling rate was 11.9 million.

Among individual automakers, Ford Motor Co., Chrysler Group LLC and Honda Motor Co. are expected to post the strongest monthly gains.

Excluding sales to car rental firms and other fleet customers, forecasters say retail sales improved in October.

In contrast with prior months, Schuster said demand doesn't appear to have flagged in the middle of the month, prompting dealers to increase their discounts. "It's not an incentive story," he said.