Falling gasoline prices didn't help automakers in August as economic worries and an overabundance of trucks rather than compact cars continued to drag down U.S. sales results.
Overall industry sales were down 15.5% last month compared with a year earlier and are off 11.2% for the year, according to Autodata Corp.
Once again, American brands led the plunge. General Motors Corp. had a sales decline of 20% in August from the same month last year, to 308,817 cars and light trucks sold. Ford Motor Co. said it sold 151,021 cars and light trucks for the month, a 26% decline. And Chrysler reported a huge 34% sales drop.
Toyota Motor Corp., the No. 2 manufacturer in terms of volume, saw a 9.4% decline to 211,533 vehicles. Honda Motor Co., which has been one of the few companies able to tread water in the brutal U.S. market, was down 7.3% on the month, to 146,855 vehicles, its worst showing of the year.
Among the world's six largest manufacturers, only one -- Nissan Motor Co. -- showed growth in U.S. sales last month. Its sales were up 13.6% in August, following an 8.5% increase in July. The strong showing put it within a hair's breadth -- just 1,743 vehicles -- of overtaking Chrysler for fifth place among carmakers selling in the U.S.
Beyond Nissan, the only carmakers to increase sales in August were Volkswagen and Subaru.
"The major issue is still the economy. It's lack of credit. It's consumer confidence," said Jesse Toprak, head of industry analysis for Edmunds.com, who said falling gasoline prices -- the national average price for a gallon of unleaded has dropped nearly 30 cents in the last month -- have had no measurable effect on sales. "There are a growing number of consumers who are willing to buy a car but can't."
The numbers did contain some glimmers of hope for automakers. The annualized selling rate rose to a pace of 13.72 million in August from 12.6 million in July. Last year, automakers sold 16.1 million vehicles nationwide.
Despite GM's 20% decline, the company's executives were surprisingly chipper, calling the August results a kind of victory because the drop wasn't as big as in the last few months. Notably, the company's Silverado pickup was the top-selling vehicle for the month, with 55,765 sold, unseating the Toyota Camry, which held the spot in July.
"We are encouraged by what we saw," said Mark LaNeve, head of U.S. sales and marketing for GM. "At some point the market bottoms out. I'd like to think it was in June and July."
Industry analysts expected a far worse month for GM, with Edmunds at one point predicting a 35% decline. But a late-month sales promotion offering employee pricing on all models delivered a real jolt to sales, LaNeve said, and large incentives on certain vehicles also helped. The company said Wednesday that it would extend the employee pricing deal through September.
But in contrast to GM's exuberance, other industry players were more reserved.
"There are too many variables still out there," Toyota spokesman Irv Miller said. "There are housing issues. The political issue is still very much up in the air and people are nervous."
Toyota has struggled to meet consumer demand for its smaller, more fuel-efficient cars. For the sixth consecutive month, cars outsold trucks in August, although by a much smaller margin than in May, June and July.
That has depleted inventories of smaller vehicles, leaving Toyota with extremely short supplies of models such as the Corolla and Prius hybrid, and as a result, sales of both actually declined on the month. Toyota said it was working to increase production of those models, as well as the tiny Yaris, by year's end.
Short supply was also an issue for Honda, which saw a 25% decline in sales of the subcompact Fit. In response, Honda plans to push up the release date for the redesigned 2009 Fit, starting sales this month.
"Meeting the demand for fuel-efficient vehicles remains a priority," said Dick Colliver, Honda's U.S. sales chief.
Nissan's results surprised the industry. Nissan posted a 33% increase in sales of trucks and sport utility vehicles in August, almost shocking considering industrywide sales in the category were down by more than one-fifth.
Executives at American carmakers suggested that Nissan's success was the result of "aggressive" sales incentives, particularly on larger, less-efficient vehicles. Nissan's incentives were up significantly from their 2007 levels, and more than double those offered by Toyota and Honda. Still, they remained lower than those from GM and Ford in many cases.
For example, Nissan's Titan full-size pickup, which starts at $23,700, carried an estimated $5,072 in incentives in August, according to Edmunds, compared with $6,534 for the GMC Silverado, which has a base price of $17,590.
According to Ford, industrywide sales incentives on passenger cars are down $100 per vehicle from a year ago, and incentives on pickups are up about $2,000.
Carmakers are working to reduce production of the larger vehicles as they retool factories and prepare to produce more of the efficient cars consumers want. Ford said its inventory at the end of August stood at 461,000 vehicles, down 37,000 from July. GM's inventory at the end of August was 736,000, down more than 200,000 from a year earlier. And with sales of the Tundra pickup down 15% on the year, Toyota has reduced inventory of that truck to 67,000, down from well over 100,000 earlier this year.
"Starting in May, we saw there would be a sharp decline in truck segment sales," said George Pipas, Ford's lead sales analyst. "We took immediate action."