Nearly every major automaker saw its U.S. sales drop in August, but many are seeing signs that the worst slump in recent history may have bottomed out.
Most upbeat were executives from General Motors Corp., which posted a 20.3 percent sales decline from a year ago but a 31 percent improvement over July’s totals.
Much of the gain came from offering all buyers employee discounts on many models, but Mark LaNeve, GM’s vice president of North American sales, said there’s hope that June and July were the trough for U.S. sales.
Overall, U.S. sales fell 15.5 percent compared with August of last year but rose 10 percent from July’s dismal figures, according to Autodata Corp. The seasonally adjusted annual sales rate for August was 13.7 million, up from 12.5 million in July, the worst month in 16 years.
Chrysler LLC said its U.S. sales fell more than 34 percent last month, while Ford Motor Co. reported a 26.5 percent decline. Toyota Motor Corp.’s sales dipped 9.4 percent, and Honda Motor Co. saw a 7.3 percent slide. Nissan Motor Co. was the only major automaker to report an increase over August 2007. Its sales climbed 13.6 percent.
But the increase over July buoyed most automakers, with sales executives saying that lower fuel prices were starting to ease consumers’ minds. They also reported the market shifting a little bit back toward trucks and sport utility vehicles, driven by incentives and lower gas prices.
Automakers said consumer sentiment was improving, housing price declines and manufacturing production are stabilizing, and exports continue to be strong.
“I think there are some positives,” Pipas said. “But the underlying economic conditions and the credit situation, which has given rise to this summer’s low level of sales, still persist.
Employee pricing, low-interest financing and other incentives pulled buyers off the fence and into the market last month and raised pickup truck sales, said Jesse Toprak, executive director of industry analysis for the automotive information site Edmunds.com.
While Chrysler had a huge decline from the year-ago period, it showed a 12.3 percent gain over July. But compared with August of last year, Chrysler’s car sales were down 39 percent and its truck sales were off 33 percent.
Ford sales dropped 3.6 percent compared with July, due in part to its continuing plan to reduce low-profit sales to rental car companies and other fleet buyers, Pipas said. The company said Wednesday that it plans to cut 50,000 more vehicles from its production plan in the second half of the year, reducing its output to 890,000 in the last six months of 2008.
The Dearborn-based automaker said its Ford, Lincoln and Mercury car sales dropped nearly 9 percent in August, while truck sales were off more than 32 percent from a year earlier.
There were some bright spots for Ford. Sales of its Focus small car were up 23 percent in August, while Escape small SUV sales rose 17 percent compared with the same month a year ago.
Both Ford and GM reported big inventory reductions in August as they switch to the 2009 model year.
Toyota said its car sales were down 3.4 percent from August 2007, and trucks were down 17.6 percent. Sales of the tiny Yaris were up more than 20 percent for the month, while the Camry midsize sedan saw sales grow by 3.3 percent, the company said.
GM said its sales of light trucks tumbled 24.1 percent from August of last year, while car sales fell 13.9 percent.
Honda’s car sales fell 4.9 percent and demand for trucks dropped 10.3 percent.
Nissan said its car sales fell 0.8 percent but its truck sales climbed 34.8 percent on strong sales of its Frontier, Xterra and Rogue models and the Infiniti EX and FX crossovers.
Auto sales is a clear indicator of the current state of the economy. Lower oil prices and deeper discounts have helped auto sales recently causing upward movement in their stock prices. However i think this is going to be short-lived and give a good opportunity to short into. I believe higher oil prices, weaker job report, weaker housing market will lead to continuing weaker auto sales. I am going to use this opportunity to look for some shorts. Keeping an eye on GM and F.