U.S. auto sales edge up, led by Hyundai boom

U.S. auto sales edged higher in November, led by an outsized gain for Hyundai Motor Co <005380.KS> and mixed results for rivals in a trend automakers said pointed to a grudging recovery in the U.S. economy.

Hyundai posted a 46 percent gain in sales for November and said it was on track to take a 4 percent share of the U.S. auto market this year, up by a third at a time when the rest of the industry has been reeling. The Korean carmaker benefited from a recent marketing push and lineup of fuel-efficient cars.

Toyota Motor Corp <7203.T>, the world's largest automaker and the best-selling brand in the U.S. market, saw a rise of nearly 3 percent in November sales.

Nissan Motor Co Ltd <7201.T>, the No. 6 automaker in the United States, reported a nearly 21 percent increase in sales. Honda Motor Co Ltd <7267.T> sales were off nearly 3 percent.

As a group, U.S. automakers lost share during the month, with Ford Motor Co distancing itself again from domestic rivals General Motors Co and Chrysler.

Ford posted flat sales while Chrysler, now under management control of Italy's Fiat SpA , said sales fell 25 percent from the same month a year earlier. GM's sales fell 2 percent.

Ford, the only U.S. automaker to have avoided a taxpayer-funded restructuring in bankruptcy, set a sharply higher target for North American production in the first quarter. It expects production to rise 58 percent from the previous year when it had cut back output as the auto market slid toward its weakest level since the early 1980s.

It appears that the economy and the auto sales have stabilized and that the worst is behind us, Ford U.S. sales chief Ken Czubay told a conference call.

Separately, GM's CEO, Fritz Henderson, will leave the automaker, a source familiar with the matter said on Tuesday. The planned departure comes after a meeting of GM's 13-member board of directors in Detroit.

SALES QUAGMIRE

U.S. auto sales results were pushed lower by a quirk in the calendar. November had only 23 selling days for dealerships -- two fewer than the same month a year earlier.

On the adjusted and annualized basis tracked by industry planners and analysts, the U.S. auto market came just short of a sales rate of 11 million units in November. That is up from 10.4 million a year ago and in line with analyst estimates.

Results confirmed the industry is on the mend after a deep four-year downturn, analysts said, but they cautioned that sales are coming back from historically low levels. Sluggish consumer confidence and rising unemployment could make any recovery slow and uneven.

You are comparing terrible numbers to terrible numbers, so it doesn't look that bad, said Dennis Virag, an analyst with Automotive Consulting Group.

There still is a very dismal state within the auto industry and it will probably be another year or so until we start pulling out of the quagmire we are in, Virag said.

U.S. auto sales have dropped more than 25 percent through October this year. The year is expected to end with an annual sales rate of about 10.5 million units, the lowest level since the early 1980s.

Many analysts and auto industry executives have forecast a modest rebound in sales next year into the 11 million to 12 million unit range.

In an encouraging development for the battered industry, the sales uptick for November came without the kind of blowout discounts that U.S. automakers have relied on in the past. Ford said incentive spending per vehicle was down between 15 and 20 percent across the industry in November from a year ago.

HYUNDAI BIG WINNER

Hyundai has taken share in a tough market on the strength of a lineup of fuel-efficient small cars and marketing that has wooed car shoppers worried about losing their jobs.

The Korean automaker said it had expected the U.S. economy to show more sustained strength by now.

We were, quite frankly, hoping that the economy and the overall industry would have bounced back a bit more, Hyundai U.S. sales chief Dave Zuchowski said.

GM was the most aggressive in discounting, spending an average of $4,270 per vehicle sold in November. The No. 1 U.S. automaker has had to discount more heavily in part to support sales of its Hummer and Saab brands.

A sale of Hummer to a Chinese equipment maker is pending. GM said it has received expressions of interest in Saab after a tentative deal for the Swedish brand collapsed last month, and its board would evaluate potential bids between now and the end of December.

GM said sales of the four brands it is keeping -- Chevy, Cadillac, GMC and Buick -- were up 6 percent from a year earlier in November, a sign its turnaround is taking hold.

The automaker plans to increase North American production by 75 percent in the first quarter of 2010 from the same period in 2009 when GM was slipping toward a government-supported bankruptcy.

GM sales analyst Mike DiGiovanni said the automaker was encouraged by signs that the worst had passed for the U.S. economy but cautioned high unemployment continued to weigh on consumer confidence.

As 2009 is drawing to a close, we feel we should be thankful that predictions of a total meltdown for the capitalist market economy did not materialize, DiGiovanni told reporters and analysts on a conference call.

Consumer confidence is rebounding sharply from February's lows, but clearly, it still remains at recessionary levels.

(Reporting by Soyoung Kim and Bernie Woodall, additional reporting by David Bailey, writing by Kevin Krolicki, editing by Matthew Lewis)