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Auto Sales Ease Up, But Optimism Grows

October 2, 2003

United States auto sales cooled from their torrid pace of August, but optimism spread among auto executives and dealers about the health of the U.S. auto market and the economy, according to the Wall Street Journal.

Overall, new-car and light-truck sales totaled 1,304,066 vehicles for September, up 6.5 percent from September 2002, according to research firm Autodata Corp. September sales translated to a seasonally adjusted, annualized selling rate of 16.7 million vehicles.

For the industry, September marked a slowdown from the summer's discount-driven 19 million pace. But U.S. sales executives and dealers

said car demand remained strong, with generous incentives helping to offset recent downbeat signals on consumer confidence and employment, the Journal said.

As gas prices eased from summer highs, consumers snapped up sport utility vehicles, pickups and other light trucks, which captured 54 percent of the total market, up from 51 percent a year ago. In Detroit, General Motors Corp. said sales increased 17.6 percent to 360,407 while Ford Motor Co.'s sales grew

5.2 percent to 294,311, helping both automakers defend their U.S. market positions.

DaimlerChrysler AG's Chrysler Group's sales tumbled 11 percent, and the company's market share slipped 2.3 percentage points to 12.6 percent of the market. Chrysler rolled out more aggressive discount deals Oct. 1, and Senior Vice President for Sales Gary Dilts said the company will "play very aggressively" in the fourth quarter.

"A hurricane on the East Coast, and back-to-school across the country moderated September sales from the strong August pace," said Paul Taylor, chief economist with the National Auto Dealers Association (NADA). Taylor said he

expects the industry to finish the year with sales at about the same level as September's annualized sales. "The year appears to be heading for sales of at least 16.5 million for all of 2003," Taylor said, according to the Journal.

Taylor said that a key source of strength in the market, "crossover" SUVs, led sales growth over last year again, by 43.1 percent for September, and 36.6 percent year-to-date. Domestic and imports grew roughly equally in this hotly contested category.

Traditional truck-based SUVs rose by 1.3 percent

for the month, but are down 4.3 percent year-to-date. Pickup truck sales picked up in September by 8.9 percent, helped by the introduction

of the new Ford F-150, and sales efforts by Chevy , Dodge and GMC.

All other categories fell versus the red-hot August results and versus last year, according to Taylor.

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