US auto sales boom in August

chrysler-carsU.S. auto sales boomed in August as $3 billion in government incentives drove sharp gains for Hyundai Motor Co and Ford Motor Co but failed to provide a boost for General Motors Co in its first full month outside bankruptcy.

Ford reported a 17 percent jump in monthly sales on Tuesday and the success of the U.S. government’s “cash for clunkers” trade-in incentives pushed overall industry sales to the first year-on-year increase in 21 months.

Korea’s Hyundai posted a 47 percent increase as sales of its Elantra sedan more than doubled.

The U.S. government incentive program also helped Honda post a 10 percent sales gain while Toyota Motor Corp sales were up 6 percent.

The two U.S. automakers to have emerged from government-sponsored bankruptcies — GM and Chrysler — lost market share during the August sales bonanza.

GM sales dropped 20 percent, while Chrysler was off 15 percent. Nissan Motor Co sales fell almost 3 percent from record levels of a year earlier.

Meanwhile, auto sales rose in France and Italy and stabilized in Spain on the success of similar government-backed sales incentives, data released on Tuesday showed.

The now-exhausted U.S. “clunkers” program, which was inspired by the programs in France and other European markets, drove a rush into dealerships in July and August.

More than 690,000 vehicles were scrapped in the United States for taxpayer-funded credits of up to $4,500 as consumers took advantage to drop gas-guzzling trucks and SUVs.

On an annualized basis, industry-wide U.S. sales topped 14 million units, according to Autodata.

That was up from 13.6 million a year earlier but still far below the 16 million range that had been seen as the bottom for the market until 2007.


The winners in the U.S. incentive program were Asian automakers and Ford, which benefited from a stronger lineup of smaller cars and crossover vehicles, analysts said.

The result has been a more evenly matched battle for sales among the major automakers in the U.S. market that threatens to upset long-held market share rankings.

Hyundai and its affiliate Kia Motors Corp now command a combined 7.5 percent market share, making them larger on that basis than Nissan Motor Co.

GM, meanwhile, saw its share of sales of its core brands — Chevrolet, Cadillac, Buick and GMC — drop to 16.3 percent of the U.S. market in August. That lagged Toyota’s U.S. market share of 17.8 percent for the month.

“I think perception hurt GM,” said Jessica Caldwell, director of industry analysis at “People didn’t really see GM as a place to turn to when they needed to buy a fuel-efficient vehicle.”

GM sales chief Mark LaNeve said the U.S. incentive program had clearly benefited Asian automakers more than GM.

“If it would have been a cash for capable trucks (program), we would have killed them, but it wasn’t,” LaNeve told reporters and analysts. “It was designed for smaller cars and smaller crossovers and although we’re gaining ground quick, they still have more volume in that area.”

Chrysler, now under control of Italy’s Fiat, said it had lost potential sales when dealers ran short on some models after it shut down all of its production during a bankruptcy process that ended in June.

Chrysler responded with a continued program of discounts of up to $4,500 in rebates on select models this month.

Meanwhile, Ford, the only U.S. automaker to avoid a federally sponsored bankruptcy, posted its second consecutive monthly sales gain and said signs of a recovery in pickup truck demand pointed toward a broader recovery in the economy.


Ford reported the first increase in sales of its market-leading F-Series pickup trucks in almost three years.

Trucks like Ford F-150 are widely used in the U.S. construction industry. Pickup sales have dropped sharply in recent years on a combination of high gas prices, tight credit and the slowdown in home building.

Although major automakers said they expected September U.S. sales to tumble in the wake of the “clunkers” boom, executives also said they were banking on improved demand in the fourth quarter and a rebound of 10 percent or more in 2010.

“We see some drop-off in September, but we are starting to see concrete signs of automotive recovery moving into the fourth quarter,” said Bob Carter, Toyota’s manager of its main brand in the United States.

BMW said it also expects U.S. sales to increase over the remainder of the year even without any further support from the Obama administration.

“I think they’ve done the experiment. It’s worked. But I don’t think it will be repeated,” BMW North America President Jim O’Donnell told Reuters.

He added: “I think car sales will continue to steadily rise as we move out of the worst of the recession.

Elsewhere, auto sales in Canada fell for a 10th consecutive month.

But France saw a 7 percent gain in August car sales and the French government said it would continue to fund its equivalent of the “clunkers” program to encourage consumers to swap out of old cars into 2011.

Car registrations in Italy were up almost 9 percent in August.

Spanish car sales stabilized in August after 16 months of declines. Car sales for Germany, Europe’s biggest market, are due on Wednesday.

Source: Reuters

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