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August Auto Sales Perk Up

September 2, 2011
4 min to read


Several major auto makers reported strong gains in U.S. new-vehicles sales for August, lifting confidence the auto industry's recovery is continuing despite worries about the economy.


Chrysler Group LLC said on Thursday its sales leaped 31 percent in August, while General Motors Co. and Nissan Motor Co. each reported increases of just under 20 percent. Ford Motor Co. posted an 11 percent gain reported The Wall Street Journal.

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In total, August sales rose 7.5 percent to 1,072,283 cars and light trucks, according to researcher Autodata Corp. The industry's gain was held back by Toyota Motor Corp. and Honda Motor Co., which suffered declines of 13 percent and 24 percent, respectively, as continuing shortages of cars and trucks damped their sales.


Most important for the industry and U.S. economy, Chrysler and GM said their sales were driven by purchases by individuals rather than fleet sales—a sign that consumer demand is holding firm. Chrysler's sales to individual customers at dealerships rose 42 percent. GM's retail sales grew by 22 percent.


"Consumers are being cautious, but they are not retrenching," Don Johnson, GM vice president for U.S. sales operations, said in a conference call.


The annualize pace of sales in August was 12.12 million vehicles, Autodata said, down from July's 12.23 million but up from the year-ago figure of 11.47 million.


Ford economist Jennifer Lin said she expects the sales rate to improve in the remaining months of the year. "We do see that the sales pace will continue to increase from this point on because although the economy is slowing, it is not contracting," she said.

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In the first quarter, auto sales were on a pace to exceed 13 million cars and trucks for the full year. But Japan's March earthquake disrupted the supply of Japanese-brand vehicles and the sales pace fell below 12 million vehicles. In recent weeks, American consumers have been buffeted by worries about declines in the stock market, the fight over the U.S. debt ceiling, and the European debt crisis.


In August Chrysler sold 130,119 vehicles. Bill Golling, owner of a Chrysler dealership in Birmingham, Mich., said he is more optimistic about sales through the rest of the year. "Going into September, I think it's going to be a little better than August," he said.


While the future course of stock market and the overall U.S. economy remain uncertain, the industry is helped because many consumers are now driving older cars and simply have to buy replacements. "I really feel pretty good going into the third and fourth quarters," Mr. Golling said.


GM sold 218,479 cars and trucks in August, up 18 percent from a year ago. GM said strong sales of its recently launched Chevrolet Cruze compact car helped drive the increase.


Toyota went in the other direction. Its sales fell to 129,483 vehicles, pulling its market share down 2.8 percentage points to 12.1 percent. Honda sold 82,321 vehicles, leaving its market share at 7.7 percent, more than three points below its year-ago level.

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Ford sold 174,800 cars and light trucks, an 11 percent rise. It was boosted by a 25 percent increase in sales of by its upscale Lincoln brand.


Nissan said its August sales surged 19 percent to 91,541 compared to a year earlier. "I'm very encouraged by August. Had we not had [Hurricane] Irene, it would have been a fantastic month. I think September will be very strong," said Al Castignetti, vice president of Nissan North America. Mr. Castignetti said the storm likely reduced sales by about 3,000 for the month.


Hyundai Motor Co. said its U.S. sales rose 9 percent to 58,505 vehicles. Volkswagen AG's rose 10 percent to 25,232 cars and trucks.


GM's Mr. Johnson said a slow recovery of the auto market appears on track and he reiterated a full-year seasonally adjusted annual rate of sales at the "low end" of a range of between 13 million and 13.5 million vehicles.


The increases signaled the industry shook off a weak July, when overall U.S. sales rose just 0.9 percent from a year ago.

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Car-shopping website Edmunds.com last week predicted overall U.S. new-vehicle sales would jump 9 percent in August from the prior year. Edmunds said while stronger buying conditions are pushing customers to purchase new vehicles, a weak economic landscape is a looming concern.


The past month had 26 selling days, one more than August of last year.


GM shares were off 4.2 percent, or $1 apiece, at $23.03, and Ford declined 2.4 percent, or 27 cents, to $10.85, both in 4 p.m. New York Stock Exchange trading.

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