Automakers Report Surprisingly Strong August Sales

Fears that car buyers would stay away from dealerships in August never materialized.

Instead, Americans were lured by new models, cheaper financing and the need to replace aging cars. As a result, August sales rose 7.5 percent compared with the same month last year, according to Autodata Corp.

Most major automakers reported healthy sales increases in August, led by Chrysler with a 31 percent jump. Toyota and Honda saw double-digit declines as they continued to struggle with earthquake-related car shortages.

Results were better than expected. Some analysts thought that the volatile stock market and Hurricane Irene would hurt sales. While it was easy for carmakers to do better than last year, which was the worst August for the industry since a double-dip recession in 1983, the results were also a sign that sales could pick up speed after a disappointing summer of little or no growth.

"Consumers are inching back into buying items and some big-ticket purchases," said Paul Ballew, a former GM chief economist who now works for Nationwide Insurance.

If sales stayed at August's pace, they would end the year at 12.1 million. That's better than the 11.6 million last year, but still far below the 17 million in 2005.

Because they have cut staff and factories since the recession, automakers are turning profits at the lower sales levels. But they're still hoping for a better autumn, as supplies of Japanese cars get back to normal and new cars such as the redesigned Toyota Camry go on sale.

Even Irene could boost sales, as people whose cars were damaged or destroyed look for new ones.

Jesse Toprak, vice president of industry trends and insights for the car pricing site, says the hurricane cost automakers about 5,000 sales in the last weekend of August, but he expects them to be made up later. GM says it will offer $500 to car buyers in major disaster areas and let those buyers defer payments for 90 days.

Chrysler Group's sales jump was due to strong demand for Jeeps and minivans. General Motors Co.'s sales rose 18 percent, led by the Chevrolet Cruze small car, which accounted for one in every 10 GM vehicles sold. Buyers also went for the Chevrolet Equinox and GMC Terrain small crossovers.

New models also boosted Ford Motor Co.'s sales, which rose 11 percent on the strength of the Ford Explorer SUV and Ford Fiesta subcompact.

But Toyota Motor Corp.'s sales fell almost 13 percent, while Honda Motor Co.'s sales slid 24 percent. Dealers are still short on many top-selling models such as the Honda Civic.

Randy Pflughaupt, Toyota's vice president of sales administration, says all of Toyota's North American plants will be fully operational this month and will crank up production with overtime and extra shifts. But supplies won't be completely back to normal levels until next year.

The industry remains wary. The unemployment rate is stuck at 9 percent, food and clothing costs are going up and consumer confidence dropped to its lowest level in more than two years in August. But August sales indicated things are on the right track, barring further bad economic news.

"Consumers are being cautious, yes, and appropriately so, but they are not retrenching," GM's U.S. sales chief Don Johnson said. "All indications to us are that the industry is going to continue to slowly grow through the rest of the year."

Other automakers reporting Thursday:

- Nissan said sales were up 19 percent on demand for the Altima midsize sedan as well as the newly redesigned Versa subcompact.

- Hyundai Motor Co. said sales rose 9 percent. Sales of the new Accent small car were up 37 percent.

- Kia Motors said sales were up 27 percent, on demand for the new Sorento crossover.

- Volkswagen AG said sales were up 10 percent on strong demand for the new Jetta sedan.

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GM's rise in sales of 18% ws due mainly to the Japanese not being able to make an sell cars due to the earthquake.; Even Chrysler outsold Toyota for the 3trd month in a row. Japanese sales were own 12% to 20% across the board. Things will soon change back to the old normal and Toyota will be the king of the hill.

September 01 2011 at 10:25 PM Report abuse rate up rate down Reply

LOL Cheap financing never sold cars, price & new models do. General Mess is a shadow of what they used to be, Ford is trhe only American car company worth a hoot.

September 01 2011 at 9:13 PM Report abuse -1 rate up rate down Reply
Samir semaan

What we have seen is manufacturing start doing good in the autos markets while manufacturing in other sectors are not doing good due to manufactures in other countries so american labors they do not benefit from and when a slight slowdown in the global economy they start feel the pain because their refusal to invest in America. What the president must say and do is a long term approach to the economy not short lived and that means build the infrustructure in this country extend bridges fix and repair old bridges extend airports fix and repair them continue to open new avenues to hire people extend tax credit to manufactures that open business in the USA. Now the question how to pay for all these projects if Congress will not finance it the best is to open oversight on the social programs how the money is spent and let the FBI do their job regarding the office of anticorruption and enforcement and who is eligible or not.

September 01 2011 at 6:36 PM Report abuse -1 rate up rate down Reply

Does anyone share my view that it's oxymoronic for Rick Perry to be running as the first Secessionist candidate for President of the United States?

September 01 2011 at 5:37 PM Report abuse -4 rate up rate down Reply
1 reply to hustonlaw's comment

He has to run; he was sent by God to run this country.

September 01 2011 at 10:50 PM Report abuse rate up rate down Reply

Can't say I've had anything but praise for my new Malibu.

I shudder to think what the unemployment rate here in Michigan would have been if GM and Chrysler had bet let go under. But I'm worried the unions will get carried away with themselves now that GM and Ford are making money again.

September 01 2011 at 3:07 PM Report abuse +2 rate up rate down Reply
2 replies to Frank's comment

I talked to a guy yesterday and asked if he liked his Malibu. He said it was his wife's car but they loved it. I hear the cruze is way better too.

Yes the mafia bosses at teh union will try to shakedown the car companies and once again put the company in a huge financial bind, That is why Obama had to save them. If GM and Chrysler were allowed to go into bankruptcy, get rid if their unions and reemerge from bankruptcy Obam would have lost his largest source of funds from the union. Obama gave the unions half of GM to help them get their health care costs in order since he couldn't bail the unions out directly without being impeached. Still every union ends up imploding spectacularly eventually, even with Obama's at their side, because they are socialists that have no shame, no self control and can never be satisfied.

Just think how strong GM would be if the unions were gone in a bankruptcy that by law shoild have happened.. No car comapny on earth could ever compete with them exceot the ones in china, indonesia and india of course.

September 01 2011 at 4:51 PM Report abuse +2 rate up rate down Reply

I will never buy a car from Government Motors.

September 01 2011 at 8:56 PM Report abuse +1 rate up rate down Reply
1 reply to savemycountry911's comment

You are not a true American!

September 02 2011 at 10:56 AM Report abuse rate up rate down

Obama's Gubmint Motors is trading at $23.08 down 4% today after missing sales increase estimate of 20% by only increasing 18% . After the Unions took GM public earlier this year, after getting GM for free from Obama after he stole it from the senior bondholders, it is off 30% off IPO price. This is what happens when you have unions and socialists running a company that used to be based on capitalism. But the lefties have run the country into the ground at the same rate too. Get rid of Obama and the lefties in the Senate and all will be well again. Remember Jimmy Carter and his merry band of socialists in congress 35 years ago? Never forget what happened then and never forget what these same socialists wealth re-distributors did to you since November 2006 and are still doing to you now. They will never stop. They have no shame, no self control of their spending and taxing additions and can never ever be satisfied until you are dead broke and just plain dead.

September 01 2011 at 1:33 PM Report abuse +5 rate up rate down Reply

Big news from Government Motors but why is the stock down again today ? Are the unions not telling honestly ??

September 01 2011 at 12:43 PM Report abuse +3 rate up rate down Reply

This is great news for GM, their workers, the communities they are in, the taxpayer, and this country. The Big 3 has been the nations largest private sector job creator over the last 2 years. I pray that people start supporting them and buying their cars. More tax revenue and profits are captured in the U.S., and it makes us stronger as a nation.

September 01 2011 at 10:39 AM Report abuse +1 rate up rate down Reply