Advertisement
Share

Vehicle Sales in U.S. See Big Decline

Times Staff Writer

U.S. auto sales slowed dramatically in August as diminishing inventories and rising fuel prices trumped the popular employee discount pricing that led the industry to two previous months of record sales.

Automakers sold 1.48 million passenger cars and light trucks in August, up 3.8% from a year earlier but down almost 18% from July, according to figures released Thursday.

Hurricane Katrina had only a small effect on August sales because it hit so late in the month. But it is expected to make itself felt for most of the rest of the year.

Higher fuel prices stemming from storm damage to the region’s oil infrastructure could drain consumers’ pocketbooks, and that could defer spending on big-ticket items such as cars, said analyst Rebecca Lindland of Global Insight Inc. in Lexington, Mass.

Advertisement

U.S. automakers’ stocks fell Thursday on fears that demand for their big sport utility vehicles would plummet because of hurricane-related gasoline price hikes. Large SUVs and pickup trucks are among the manufacturers’ most profitable vehicles. Trucks still account for more than half of all U.S. passenger vehicle sales, but volume dropped 1% in August, while passenger car sales rose 9.7%.

General Motors Corp. shares declined 3% to $32.97 and Ford Motor Co. fell 2% to $9.73. DaimlerChrysler, parent of Chrysler Group -- the healthiest of the U.S. companies -- dropped 1% to $51.24.

On the sales front, GM led the August slowdown with a 13.2% drop from a year earlier.

The company, which started employee discount selling in June, simply ran out of its most popular models and had little for customers to buy, analysts said. GM’s slide overshadowed sales gains of 7% at Ford and 5.1% at Chrysler Group.

All three companies said Thursday that they would extend employee discount pricing through September. Chrysler Group is discounting only 2005 models; GM and Ford also are offering the discounts on many 2006 SUV and pickup models.

Although buyers can save thousands of dollars through the programs, a study this week by online automotive information service Edmunds.com showed that incentive spending actually dropped in August.

The industry average -- including price discounts, cash rebates and reduced interest rates -- was $2,655 per vehicle, down $66 from a year earlier and off $326 from July. Ford’s discounting was the heftiest, at $3,799, while GM, usually the incentive leader, spent $3,718 on each car and truck. Japanese automakers’ spending averaged $1,262 per vehicle.

The sales slump at GM, which had been expected by most analysts, was so pronounced because it had been depleting its inventory through deep discounting since June. Last year, the automaker crammed most of its summer clearance program into August, which boosted sales for that month well beyond normal.

Advertisement

This year, GM “went into the month with supplies so low that the flashing-blue-light specials just didn’t do much for them,” said Detroit-based analyst James Sourges of Capgemini’s automotive group.

Both GM and Ford said Thursday that they would increase production in the fourth quarter, the first time this year either company has boosted factory output.

Meanwhile, Asian carmakers posted strong August sales gains, led by Honda Motor Co.'s 23.3% increase.

“They have been helped by the perception their cars and trucks have better gas mileage” than domestic brands, Lindland said.

Advertisement

Honda and Japanese rivals Toyota Motor Corp. and Nissan Motor Co. also launched their summer clearance sales in August, one of the few times each year that the companies advertise discounting.

Nissan’s sales rose 15% from a year ago; Toyota’s were up 13.8%.

U.S. automakers held a 54.1% share of the passenger vehicle market in August, down from 58% a year earlier. Asian brands’ share rose to 39% from 35.2%, and European carmakers’ share rose to 6.9% from 6.8%.

Because U.S. automakers’ sales were much weaker in the first part of the year, their cumulative January-to-August sales gains are more modest.

Advertisement

GM sales rose just 1.9% for the full eight months and Ford’s were up 1.4%. Chrysler Group, which has benefited from several popular new cars including the redesigned Chrysler 300 sedan and Dodge Magnum sport wagon, saw sales rise 7.4% through August.

Nissan, which also has had a string of hits with new designs for its Maxima and Altima sedans, full-size Titan pickup and Armada SUV, led all major import brands with a 14.9% sales gain through August.

*

(BEGIN TEXT OF INFOBOX)

Advertisement

August slowdown

August vehicle sales by company and percentage increase from a year earlier:

*--* Company Vehicles sold % change General Motors 347,080 -13.2% Ford Motor 269,125 +7.0 Toyota Motor 205,362 +13.8 Chrysler Group 187,085 +5.1 Honda 156,173 +23.3 Nissan 92,365 +15.0 Hyundai Motor 42,113 +9.3 BMW 25,537 +15.2 Volkswagen 23,083 +1.6 Mazda Motor 22,135 +4.3

*--*

Advertisement

Source: Autodata Crop.

Los Angeles Times


Advertisement