NOVEMBER 1, 2011, 1:19 P.M. ET.

October U.S. Auto Sales Hit Yearly Peak

By NEAL E. BOUDETTE

U.S. auto sales surged in October to their fastest pace of year, defying the sluggish economy, with a revived Chrysler Group LLC leading the way.

The Auburn Hills, Mich., auto maker said its sales climbed 27% in October, to 114,512 cars and light trucks, with its Jeep brand having its best month in five years. Ford Motor Co. reported its new-vehicle sales rose 6.2% to 167,502 light vehicles, while General Motors Co. experienced slower growth, with sales rising 1.8% to 186,895 vehicles.

Volkswagen AG said sales of its VW brand jumped 40% to 28,028 cars. Nissan Motor Co. said its U.S. October sales rose 18% to 82,346, boosted by a 47% increase in deliveries of its Versa subcompact car. A figure for total industry sales was not yet available on Tuesday because some auto makers were still reporting their results.

GM estimated the U.S. annualized seasonally adjusted sales pace in October was 13.4 million cars and light trucks. If that holds, it would be the fastest pace of the year and would best the 13.1 million level that industry reached in September.

GM sales analyst Don Johnson said he expects the sales pace to remain above 13 million vehicles in the final two months of 2011, and to move higher next year.

"No doubt we're seeing a kick up" in the pace of sales," Mr. Johnson said in a conference call. "In 2012, we see 13 million as the [annualized sales] baseline."

One reason auto sales are continuing to move up while the rest of the U.S. economy struggles is that many Americans held off buying new cars during 2009 and 2010 and now have older vehicles that have to be replaced.

Inventories of Toyota Motor Corp. and Honda Motor Co. vehicles, which had been in short supply during the summer due to production interruptions related to the March 11 earthquake and tsunami in Japan, are now improving and helping their sales.

Toyota and Honda also are offering more generous discounts to lure customers back, too. Toyota offered an average of $2,367 in sales incentives on each car its sold in October, 6.6% more than in September, according to auto information website Truecar.com.

Last month, Joann VanDerpoel spent $29,700 on a new Lexus CT200h hybrid hatchback that unexpectedly caught her eye. She had been driving a 2004 Subaru that had 80,000 miles on it and was going to need new tires and a few other repairs soon. When she found out Lexus had a special deal on the CT, including a 2.2% financing rate, she picked out a matador red model and drove off.

"It was totally spur of the moment," said Ms. VanDerpoel, a pharmaceutical marketing specialist in Basking Ridge, N.J. And for her, the economy wasn't such a big worry. "I feel stable in my job. We own our condo. We have no mortgage payments, so I was OK with a car payment."

Chrysler said its Jeep sales rose 25% to 35,733 vehicles. Sale of its Ram pick up increased 21% to 21,037 trucks. The company said it was helped mainly by increased consumer demand as opposed to higher sales to fleet customers like rental-car companies. Chrysler's sales to individuals rose 40%, it said.

Dearborn, Mich.-based Ford got a boost from its F-Series pick up trucks. Sales of those high-margin vehicles rose 7% to 52,511. It was also helped by 30% rise in sales of Escape sport-utility vehicles. However, its struggling Lincoln luxury brand reported an 11% drop in sales.

GM saw a 6% increase in sales by its Chevrolet brand, with strong gains by its Cruze and Equinox crossover showing strong performances. The company sold 1,108 Chevy Volt electric cars, a 50% jump from September. Sales in GM's Buick division fell 7%, however, and its Cadillac brand suffered a 12% decline.

Write to Neal E. Boudette at neal.boudette@wsj.com

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