U.S. Auto Sales Keep Dropping in October

(MoneyWatch)  U.S. auto sales kept dropping in October, according to edmunds.com.

Based on shopping data from the edmunds.com consumer web site, October sales fell 28.9 percent from the year-ago month, the company said.

As bad as that is ?€" and it's terrible news -- at least it's not hugely worse than the fall-off in September. Last month U.S. auto sales fell 26.6 percent from the year-ago month, according to AutoData. Monthly sales have fallen more steeply all year, due to gas prices, the shaky economy, and now the credit crunch and what's looking like the onset of a U.S. recession.

The long Columbus Day weekend usually provides a small sales boost, but not this year, said Jesse Toprak, Executive Director of Industry Analysis for edmunds.com.

November is usually a slow sales month, Toprak said. That leaves December as the best hope for any improvement in U.S. auto sales this year.

Historically, December is usually a strong month, especially for luxury brands. Lexus has a growing annual tradition of a "December to Remember" sales promotion -- you know, with the big bows on top of the car? -- which in fact has crept into late November the last few years, even starting before Thanksgiving. Mercedes-Benz and other luxury brands have followed suit with year-end sales that start in November.

In all, for 2008 edmunds.com now expects U.S. auto sales of about 13.6 million units. That would be the lowest since 1993, and the biggest one-year drop since the 1991 recession. In 2007, U.S. auto sales were about 16.1 million units.

Toyota is offering zero-percent financing on 11 models through Nov. 3. Edmunds.com predicts that discounts boosted Toyota's U.S. market share in October to around 19.1 percent in October, up from 16.1 percent in the year-ago month.

But that's only because on average, the rest of the U.S. market fell worse than Toyota. Despite the bargains, edmunds.com predicts that Toyota's October sales were down 15.5 percent from the year-ago month.