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Auto sales show a steep decline, survey says

Early October figures reflect rising gas prices and the ending of sales incentives.

DETROIT - U.S. auto sales fell precipitously in the first part of October, as employee-discount incentives ended and gas prices made consumers jittery, the results of a survey released Friday suggested.

The numbers also showed a possible fallout from strong summer sales, according to Power Information Network, a division of J.D. Power and Associates.

New-vehicle sales were down 33 percent in the first nine days compared with the same period a year ago, and down 44 percent compared with the first nine days of September, the survey found.

Sales at No. 1 automaker General Motors Corp. were down 57 percent, while Ford Motor Co.'s sales were down 45 percent. The other seven major automakers also showed declines.

"The aftermath of the employee pricing programs is having a dramatic impact," said Jeff Schuster, executive director of global forecasting at J.D. Power. "A lot could happen between now and the end of the month, but at this point, we're on track for an October like we haven't seen since the early 1990s."

Last month, lower sales of sport utility vehicles, coming amid higher gas prices seen in the wake of Hurricane Katrina, dragged down U.S. automakers who were expecting a dropoff in sales after offering employee prices on many models to consumers during the summer months.

Asian brands, which didn't offer employee discounts, fell less sharply.

GM introduced the incentive in June and planned to end it in July, but it proved so popular the company extended it several times until the end of September. Ford and DaimlerChrysler AG's Chrysler Group matched the program in July, but ended theirs in early October.

GM spokeswoman Susan Garontakos said the company wasn't planning immediate changes to its incentives, but saw the October decline as attributable mostly to 2005 model year vehicles being cleared out earlier in the year.

According to the PIN survey, DaimlerChrysler AG's sales were off 32 percent in early October, while Nissan North America recorded a 21 percent decline.

American Honda Motor Co. showed the smallest decline of 8 percent, followed by Toyota Motor Sales USA, which had a 14 percent drop.

"It will be interesting to see if the automakers, particularly GM and Ford, can hold back on incentives if their sales and share continue to slip," said Tom Libby, senior director of industry analysis at PIN. "I expect they will find a way to boost sales. I doubt that they will just sit back and let this trend continue."

[Last modified October 15, 2005, 01:15:22]