Ford, GM, Toyota See US Sales Slump in August
General Motors,Toyota and Ford all had declining US sales during August compared with the same time in 2009, proving the auto industry still has a way to go before it recovers, say analysts.
Sales for General Motorsin August fell 7 percent from the same time last year. For their core brands— GMC Chevy, Buick and Cadillac— sales fell 7.3 percent in August compared to July of 2010.
CNBC reports auto sales by the same number of sales days in the month. There were 25 days in August of this year, while August of 2009 had 26.
But among the four continuing GM brands, Buick and Cadillac reported sales grew 66% and 83%, respectively, this August from August 2009.
GM said total combined sales of the four brands were 184,921, down from 206,818 and busting a 10-month streak of year-over-year gains. But the company put a positive take on the results.
"All things considered, the auto market still looks strong," GM's vice president of US sales Don Johnson told CNBC Wednesday. "I think the economy still looks strong as well." (see video clip below for full interview)
Including all brands, GM's sales decreased 25% to 185,176, compared with a year-ago total of 246,479, and is somewhat worse than what analysts at Edmundsexpected.
GM last month filed plans to launch an initial public offering, which sources expect could raise $10 billion or more, as it prepares to return to the public market.
The move will allow the U.S. government to begin offloading the stake it acquired through last year's rescue of the auto industry. GM is eager to cut ties with the U.S. government as soon as possible, saying the relationship is a turn-off to potential customers.
Ford also says its U.S. sales were down in August—7.1 percent from the same time last year. Ford says it's lowering its fourth-quarter production slightly because of lackluster demand. Vehicle sales for Ford, without Volvo, totaled 157,503 units this August versus 176,323 in August of 2009.
And Toyota reported declining U.S. sales for August. The Japanese automaker plagued by recalls, says sales plunged 31.4 percent (adjusted for sales days) compared with August last year. But the poor comparison was expected since Cash for Clunkers helped sales of smaller Toyota cars such as the Corolla and Camry sedans.
Nissan posted a sales drop of 27 percent in August from the same time in 2009.
But Chrysler, now operating under the control of Fiat, bucked the negative trend and reported a 7 percent increase in U.S. sales of 99,611 units in August—compared with sales in August 2009 of 93,222 units. Almost 40 percent of Chrysler's U.S. sales through July were to fleet customers, according to industry estimates.
Subaru said Wednesday that its U.S. sales rose by more than 9 percent in August, helped by its popular Outback crossover vehicle. Subaru sold 11,204 vehicles in the U.S. during August, up from 10,223 in the year-ago month.
Overall, sales in August, typically among the year's strongest months, tailed off in the final week, says Jeff Schuster, executive director of global forecasting for J.D. Power and Associates.
"There hasn't been enough horsepower behind the recovery to motivate consumers to regain their confidence and purchase vehicles at a higher rate," he says.
Automakers have been reluctant to increase incentives such as rebates and low-interest financing. Most car companies are making money at lower sales levels because they've cut production.
They no longer need to offer cars at below break-even prices just to move them off lots. Other auto makers will be releasing their sales figures through the day.
"We are crawling around," Jesse Toprak, an analyst at industry-tracking website TrueCar.com, said Friday. "It feels like we got a dead car to jump-start but we just can't get it to go over 20 miles an hour."
U.S. economic growth was revised down to a 1.6 percent annual rate in the second quarter, pointing to an even softer third quarter, but analysts so far do not expect the economy to slide back into recession.
Meanwhile car sales around the world are showing both declines and increases. Asian auto sales soared in August, boosted by government incentives, although U.S. economic uncertainty and slowing growth in China look set to curb demand.
And in Europe, car sales fell in August. French, Spanish and Italian auto sales declined, as scrapping incentives are fading or have run out in those markets.