Honda Motor Co. said Monday its U.S. sales were growing in October, defying analysts’ projections.
That may drive industrywide deliveries to exceed the average outlook, already anticipated as the best in eight months.
Honda has lost about 200,000 planned deliveries since the March 11 earthquake and tsunami, according to John Mendel, who leads the company’s U.S. sales efforts.
With plants running overtime, he expects to make up half of them before the year is over, starting in October with the company’s first gain since April.
That contrasts with an average 2.5 percent decline estimated by five analysts surveyed by Bloomberg.
Higher output from Honda and Toyota Motor Corp. combined with growing demand for full-size trucks by Ford Motor Co. and General Motors Co. probably accelerated the seasonally adjusted annual rate to 13.3 million sales.
That would be the fastest pace since February. The rate dipped below 12 million in May and June.
“Everything we have inventory of is doing well,” Mendel said, singling out the lack of Fit subcompacts.
Dealers took orders for more than 50,000 Hondas and almost 6,000 Acuras from mid-June through August, locking in buyers with lease deals and low-interest loans. Those customers provide a fourth-quarter “tailwind,” Mendel said. “The dealers are feeling pretty good.”
While Honda beating expectations may indicate the industry is recovering faster than the analysts’ consensus, Mendel said he doubts October’s pace exceeded February’s 13.3 million.
“I don’t know that it will be the best month of the year,” he said in an interview last week in Carlsbad, California. “I wouldn’t say it’s a robust market. We’re benefiting quite frankly from pent-up demand.”
“Modest signs of life” in the construction industry, combined with the need for replacement vehicles and rising discounts will drive growing truck sales, said Peter Nesvold, an analyst at Jefferies Group Inc.
The average age of U.S. vehicles has surged to 10.7 years, from 8.9 years at the start of the decade, according to R.L. Polk & Co.
GM may report a 6.7 percent increase in October sales, the average of eight analysts’ estimates. The automaker increased average incentive spending in September by 15 percent to $3,749 per light truck, according to Autodata Corp. GM’s truck discounts through September fell 4.6 percent, according to the researcher.
Sales for Ford may rise 6.6 percent, the average of eight estimates.
Higher prices and fewer incentives boosted the automaker’s pretax profit by $900 million in the quarter ending Sept. 30, when it earned a net income of $1.65 billion.
GM is offering discounts of $5,505 and interest-free financing to some buyers of 2011 model-year Silverado pickups, according to AIS Rebates, a provider of incentive data to dealers. Ford is offering $5,000 for some buyers of 2011 F-150 trucks.
Housing starts climbed 15 percent in September to the best annual rate since April 2010, according to the Commerce Department. U.S. construction spending unexpectedly rebounded in August by 1.4 percent, department figures showed Oct. 3.
“I’m not a housing bull, I’m not a construction bull, but at the margin there are a couple of data points that look a little bit better,” Jefferies’ Nesvold said in a conference call with reporters Thursday.
Chrysler Group LLC, controlled by Fiat SpA, may say deliveries surged 28 percent in October, the average of seven analysts’ estimates.
Toyota and Honda’s return to full production helped increase car inventory to 44 days of supply in October from 40 days in September, according to J.D. Power & Associates.
“It’s going to be a better month because the availability is there,” Alan Baum, a consultant at Baum & Associates, said.
Toyota, ramping up production of models such as the redesigned Camry sedan, may say sales fell 9.1 percent, the average of five analysts’ estimates in a Bloomberg survey.
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