updated 10/1/2003 10:31:58 AM ET 2003-10-01T14:31:58

U.S. auto sales slowed in September from their torrid August pace, but automakers on Wednesday said car and truck buyers shopped at a healthy rate last month, thanks to incentives, new models and an improving economy.

GENERAL MOTORS CORP. said its September U.S. sales were up 12 percent over the same month a year ago. Ford Motor Co.’s U.S. sales were down 0.5 percent, while DaimlerChrysler AG’s Chrysler arm said its sales slumped 15 percent.

All three tweaked their incentives on Wednesday, raising the deals on 2004 models as their 2003 model stocks declined thanks to record-high rebates and generous loan deals.

Paul Ballew, GM’s director of industry analysis, said U.S. auto sales hit a seasonally adjusted annual rate of about 16.8 million light vehicles in September. That’s well below the 19 million annual rate hit in August, but better than the 16.2 million rate from September 2002, which followed a similar August boom.

“It’s a very solid month for the industry,” Ballew said.

While some analysts have said healthy auto sales were an indicator of an improving U.S. economy — with growing gross domestic product and more customers saying its a good time to buy a car or truck — others noted that most of September’s sales from Detroit’s Big Three came from old 2003 models carrying profit-devouring rebates of up to $7,000.

One up, two down
GM sales, which beat analysts’ estimates, were driven mostly by its pickups and sport utility vehicles. GM on Wednesday sweetened the U.S. sales incentives on much of its lineup, with ”bonus cash” on many pickup trucks and sport utility vehicles as well as zero-percent financing on more vehicles.

Ford’s sales were essentially flat, excluding foreign brands and heavy trucks, with its new F-150 pickup selling strongly. Estimates for Ford’s sales had ranged from flat to down 10 percent as the automaker faced a tough comparison with last year.

While Ford hasn’t offered quite as much in incentives as GM, it did stake new ground last month in Detroit’s price war by offering six-year, no-interest loans on five models, including its Explorer sport utility vehicle.

“Ford’s September performance is not due to a product-led revitalization; it’s due to Ford’s large stock of 2003 model year vehicles that it is clearing out with unprecedented incentives,” Goldman Sachs analyst Gary Lapidus said in a research note.

The world’s second-largest automaker has been forced to push for deeper cost cuts to meet its profit forecasts thanks to higher-than-expected costs from Detroit’s ongoing price wars. It announced on Tuesday it was cutting about 3,050 salaried jobs in North America, nearly all among contract workers and vacant positions.

Chrysler’s sales decline was due in part to a comparison with an especially strong September 2002. Only its Jeep Grand Cherokee SUV pulled out a sales increase over a year ago, but sales of its Pacifica wagon grew from levels posted in August.

Foreign makes ride high
Foreign automakers continued to ride high in the market, driven mostly by new models. Toyota Motor Corp. said its sales were up 10.5 percent, thanks to demand for its Highlander SUV and Camry sedan. Unlike August, Toyota and Lexus combined did not outsell Chrysler.

Honda Motor Co. Ltd. said sales were up 0.9 percent, led by three models of SUVs. Nissan Motor Co. Ltd. said its sales were up nearly 20 percent, with strong sales of new models such as its Quest minivan and 350Z sports car.

Among smaller companies, Hyundai Motor Co. Ltd. said its sales were up 2.2 percent, while Volkswagen AG said its sales were off 2.7 percent.

Copyright 2012 Thomson Reuters. Click for restrictions.

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