DDAIF Mercedes Benz Group AG (PK)

Light vehicle sales in the U.S. rose 7.5% to 1.02 million units during October, the best since October 2007, driven by strong sales of sports utility vehicles (SUVs) and trucks. At seasonally adjusted annualized rate, sales increased 8% to 13.3 million units from 12.3 million units in October 2010.

Total car sales escalated 7.4% to 468,533 units while sales of light trucks (minivans, sport utility vehicles and pick up trucks) went up 7.6% to 548,799 units (all including imports).

All the major automakers posted a rise in sales during the month, except Toyota Motor Corp. (TM) and Honda Motor Corp. (HMC) due to parts supply shortages following the earthquake and tsunami on March 11, 2011.

U.S. Automakers

Sales at General Motors Co. (GM) edged up 1.9% to 186,895 vehicles. The marginal rise in sales was attributable to increase in sales of Chevrolet brands of vehicles (6%) and decrease in sales of other brands (GMC, Buick and Cadillac). The automaker saw strong demand for SUV Chevrolet Equinox, and cars including Camaro and Cruze. Its plug-in Chevrolet Volt recorded its best month with the sale of 1,100 units.

Sales at Ford Motor Co. (F) rose 6% to 167,803 cars and trucks, with strong demand for SUVs including Explorer and Escape. Sales of Ford branded vehicles rose 12.6% while that of Lincoln fell 10.8% during the month.

Sales at Chrysler Group LLC, controlled by Italy’s Fiat SpA (FIATY), soared 27% to 114,512 vehicles, driven by Jeep brand and Ram trucks. The company’s namesake brand posted its best October since 2007. The Jeep brand sales were helped by the new compact SUV Compass as well as the Wrangler.

Japanese Automakers

Sales at Toyota dipped 7.9% to 134,046 vehicles. Sales of Toyota’s best-selling vehicle Camry fell 11.9% to 22,043 vehicles while sales of Corolla declined 12.8% to 16,244 vehicles.

Sales at Honda dipped marginally to 98,333 vehicles from 98,811 vehicles in October 2010. Its best-selling model was Accord, which saw a 5.3% rise in sales to 22,589 units.

Sales at Nissan Motor Co. (NSANY) appreciated 18% to 82,346 vehicles during the month under study. Nissan Division sales grew 22.1% while Infiniti vehicles sales slid 13.5%. The company’s best selling models during the month included Versa sedan, Nissan Altima, and Rogue crossover.

Other Automakers

Sales at Daimler’s (DDAIF) Mercedes-Benz grew 28% to 24,449 vehicles, driven by the C-Class model (88% increase), CLS-Class (more than doubled) and, SLK Roadster (58.2% increase).

Sales at Hyundai Motor (HYMLF) went up 23% to 52,402 vehicles. Elantra, Santa Fe, and Tucson are some of the models which showed significant sales growth during the month. Meanwhile, sales at Kia Motors increased 21% to 37,690 units, with strong demand for Optima, Soul and Sportage models.

Our Take

We are overwhelmed by the impressive growth in auto sales in the U.S. Since the global economic crisis kicked in, we have seen such sales growth when the government announced the Cash for Clunkers program in August 2009.

According to Truecar.com, industry’s average transaction price was $30,487 during the month under study, up $138 from September this year and up $1,390 from October 2010. This clearly indicates an upward trend in vehicle sales.

However, we are still worried about the higher unemployment rate (9%), surging food and clothing costs and a weak consumer confidence.

 
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