By Bernie Woodall
DETROIT (Reuters) - The U.S. auto industry continued its moderate recovery in October and will show a 5.7-percent rise in sales from last year, analysts polled by Reuters said.
Chrysler Group and Nissan Motor Co (T:7201) will lead the growth with double-digit gains over a year ago, the analysts said.
Major automakers issue sales reports on Monday. Auto sales each month are an early indication of U.S. consumer spending.
Ford Motor Co (N:F) is expected to experience its second straight month of year-on-year sales declines, mostly because of the limited production of its best-selling F-150 pickup truck as the automaker transitions to the new aluminium body model.
"We're looking at the strongest October since 2004," said John Kracik, president of industry consultancy TrueCar.
In the Reuters poll of a dozen analysts, most forecast a seasonally adjusted annualised rate of October sales at 16.3 million, while the range was from 16.3 million to 16.5 million.
A separate Thomson Reuters poll of 28 economists showed an average forecast of 16.5 million on an annualised basis, and a range of forecasts from from 16.3 million to 16.8 million.
The industry will make the gains despite a 12 percent fall in incentive spending from a year ago, TrueCar said.
While TrueCar said incentive spending is being held in check, another consultancy, Kelley Blue Book, said it is at worrisome levels of nearly $3,000 per vehicle. Incentives cut into automaker profit and before the 2008-2010 recession were at levels that hurt U.S. domestic carmakers.
As "inventory levels have remained consistent," said Kelley Blue Book analyst Alec Gutierrez, "this isn't a red flag quite yet, but it does underline that the natural industry growth we've had in recent years is slowing."
Gutierrez said the ratio of incentive spending to the price of a car is at its highest level in four years.
Auto sales have "settled into a groove" and will remain steady through the end of the year as gasoline prices fall and truck and SUV sales rise, said Jessica Caldwell, analyst with industry consultantcy Edmunds.com.
The Reuters poll of analysts showed the following forecast for major automakers, listed by U.S. sales in October: General Motors Co (N:GM), up 2.5 percent; Ford, down 4 percent; Toyota Motor Corp (T:7203), up 7 percent; Chrysler Group, a unit of Fiat Chrysler Automobiles (MI:FCHA), up 22 percent; Honda Motor Co (T:7267) up 8 percent; Nissan up 11 percent; and sister companies Hyundai Motor Co (KS:005380) and Kia Motors Corp (KS:000270), up 5 percent.
(Additional reported by Ben Klayman in Detroit; Editing by Chizu Nomiyama)