UPDATE 4-U.S. auto sales rise in November, boosted by discounts

Tue Dec 3, 2013 3:28pm EST
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* November sales rise 8.9 pct, monthly rate hits 16.41 mln

* Big pickup trucks still popular with U.S. buyers

* Incentives average more than $2,500/vehicle

By Ben Klayman and Deepa Seetharaman

DETROIT, Dec 3 (Reuters) - Major automakers reported their best U.S. sales month in six and a half years in November as aggressive discounting and the continued popularity of big pickup trucks helped trounce Wall Street forecasts.

The industry's annual U.S. sales pace reached 16.41 million vehicles last month, the best monthly showing since February 2007, according to industry research firm Autodata. This handily beat expectations for a rate of 15.75 million.

Yet shares of General Motors Co and Ford Motor Co slid more than 3 percent as some investors worried that the discounts signaled a return to the unhealthy practices that eroded industry profits in the years before the global recession of 2009.

Other investors also fretted that consumers' need to replace aging vehicles, which propelled U.S. light vehicle sales after the recession, would not support the current pace of sales gains in 2015 and beyond.

"The sales rate for cars increased so dramatically in the last several years," said Jesse Toprak, an analyst with research firm Truecar.com. "The fear might be that it's not going to hold up beyond next year." But Toprak said he does not share this view.   Continued...