LOS ANGELES - Toyota Division sales may have fallen 34 percent in August -- and are now down 1 percent for the year to date -- but General Manager Bob Carter isn’t panicking.

Toyota was the No. 1 beneficiary of cash-for-clunkers trade-ins last August, representing more than 50 percent of sales. That gave Toyota a tough mark to equal this year, Automotive News reported.

Despite that target, Toyota remained the No. 1 brand in retail sales this August, and the Camry was the top-selling passenger car. Fleet sales were just 6 percent of volume, compared with 9 percent for the year, which crimped overall numbers.

“The numbers don’t look very pretty, but August was a fair month for Toyota,” Carter said in a conference call. He noted that August vs. July 2010 sales showed a slight decline.

Toyota conquest rates remain at pre-January recall crisis levels, with 57 percent of trade-ins coming from competitive makes, Carter said.

Customer response to the Toyota Auto Care promotion, which offers two years of free maintenance, was so strong that Toyota will continue it through September. The promotion was set to expire after Labor Day.

Toyota’s incentive spending was about $2,200 per new vehicle sold, according to the Power Information Network. While high for Toyota, it’s still “a function of the economy” and “at the lowest levels of the industry,” Carter said.

Carter sees both caution and optimism in consumer confidence. Despite recent disappointing data on jobs and housing, the recovery remains on track, albeit at a decelerated pace, he said. Toyota is predicting 2010 sales of between 11.2 million and 11.5 million vehicles.

Perhaps because consumers aren’t ready to plunk down money on a new car, sales of Toyota certified pre-owned vehicles showed their best August and the brand’s fifth consecutive record month.