November auto sales rise, industry in gradual recovery

DETROIT (Reuters) - Automakers posted better-than-expected U.S. auto industry sales for November on Wednesday and pointed to a slow but steady return in consumer demand from the depressed levels of a year ago.

Auto sales were expected to reach about 12.2 million units, a second straight month above 12 million, potentially hitting the highest level since the September 2008 financial meltdown, excluding last year's months that were boosted by government incentives.

Automakers said on Wednesday that they expect U.S. auto industry sales overall to be up about 15 percent in November from a year earlier, which exceeds the average analyst expectation for an increase in the low double-digits.

Ford Motor Co reported a 24 percent increase in sales. Chrysler sales rose 17 percent and General Motors Co sales were up 11 percent overall. Ford sales exclude the Volvo car unit it sold to China's Geely in August.

Toyota Motor Corp <7203.T> sales dropped 3 percent in November, slightly deeper than the 2 percent drop analysts expected, illustrating the difficulties Toyota still faces in winning back U.S. consumers a year after starting recalls that rocked its reputation for quality and safety.

Toyota has recalled about 14 million vehicles worldwide since last November, including 11 million in the United States. On Monday, Toyota said it would replace potentially defective coolant pumps on 378,000 U.S. Prius hybrids.

"Without new product to compete with and stripped of its bullet-proof quality reputation, Toyota is forced to sell on the deal," Edmunds.com senior analyst Jessica Caldwell said.

GM said growing pent-up demand for cars will be released as the economy continues to improve.

"We see people showing an increasing willingness to go out into dealerships and into malls," said Jim Bunnell, general manager of GM's U.S. sales operations. "It's not going to happen overnight, but we think through 2011 we're going to see a continued gradual improvement."

Auto sales for November are one of the first snapshots of consumer behavior at the holiday shopping season. However, automakers typically run year-end discount programs from before the U.S. Thanksgiving holiday through year end.

The final weekend of November sales was lifted by Thanksgiving holiday deals sponsored by individual dealers and manufacturers, including Toyota Motor Corp <7203.T> and Nissan Motor Co <7201.T>, analysts said.

Internationally, Japan November car sales fell 31 percent excluding mini-vehicles, a third consecutive monthly decline. Most European markets also posted November auto sales declines after government incentive programs came to an end.

Car sales fell 11 percent in France, 25.5 percent in Spain and 21 percent in Italy, which all had scrappage programs. Sales rose more than 15 percent in Belgium, which did not have incentive programs.

GM CORE BRANDS UP 21 PCT

GM's shares were up 1.9 percent at $34.85 in afternoon trading on the New York Stock Exchange, while Ford shares rose 3.3 percent to $16.47. The broad S&P 500 index was up 2.1 percent.

Hyundai Motor Co <005380.KS> posted a 45 percent jump in sales in November from a year earlier and set an annual U.S. sales record for the Korean automaker. Nissan Motor Co Ltd <7201.T> sales rose 27 percent overall.

Sales of GM's four core U.S. brands rose 21 percent in November from a year earlier amid higher prices and reduced incentives, GM said in its first sales results since it completed the largest-ever IPO in November.

GM said its core Chevrolet, Buick, GMC and Cadillac brands were on track to gain market share for the year. Sales of GM's Chevrolet Traverse, GMC Acadia and Buick Enclave sister crossovers rose a combined 38 percent from a year earlier.

GM said sales of its new Chevy Cruze helped punch car sales up 17 percent in November from a year earlier.

GM said its average transaction prices were up $1,300 in November from a year earlier, while incentives were down. Industrywide incentives were up slightly in November from a year earlier.

Ford left its fourth-quarter production plan intact and announced that first-quarter 2011 production would be up 11 percent from the first three months of 2010 amid more signs of growth in the U.S. economy and demand for new vehicles.

The F-Series pickup truck continued to lead Ford sales overall and the Fusion sedan has already set an annual sales record with one month left in the year, Ford said. Sales of the Ford Edge crossover rose 55 percent.

After a disastrous 2009 that saw GM and Chrysler collapse into government-funded bankruptcies, the industry is expected to see 2010 sales of about 11.5 million vehicles. That would represent a gain of about 10 percent.

Most industry estimates for 2011 put sales between 12 million and 13 million vehicles. Before the financial crisis, automakers routinely sold more than 16 million vehicles per year in the U.S. market.

(Reporting by David Bailey, Kevin Krolicki, Bernie Woodall and Deepa Seetharaman, editing by Matthew Lewis)