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U.S. auto sales dropped to their weakest rate since February as most automakers posted sharp declines from a year earlier, when the U.S. cash-for-clunkers program fueled demand for new vehicles.
August's seasonally adjusted annual sales rate of 10.8 million units fell from 11.6 million in July and was well below analysts' forecasts, according to the Automotive News Data Center. Bloomberg News and Autodata Corp. separately pegged the August SAAR at about 11.5 million units.
After August sales tumbled 21 percent, industry sales are now up just 8 percent from 2009 levels, when demand hit a 27-year low.
“The car market and the overall economy are pretty weak,” said Joe Phillippi, principal of consulting firm AutoTrends in Short Hills, N.J. “Showroom traffic is down. We still have issues on the margin with some people not being able to get credit, and people are nervous.”
Ford Motor Co.'s August sales dropped 14 percent from a year ago -- when the ‘clunkers' program boosted sales 17 percent. General Motors Co. posted a 25 percent decline. While most automakers benefited from the ‘clunkers' program, GM suffered a 20 percent sales decline in August 2009 -- its first full month after exiting bankruptcy.
The cash-for-clunker program provided government cash incentives of $3,500 or $4,500 for consumers who traded in an older car or truck for a more fuel-efficient vehicle. The federal incentives helped U.S. auto sales end a 21-month skid in August 2009, rising a modest 1 percent above August 2008.
At Toyota Motor Corp., which racked up big sales numbers as a result of the ‘clunkers' program, August sales plunged 34 percent. The automaker's year-to-date sales are now off 1 percent.
“Toyota was expected to report a big year over year decline because it was one of the biggest beneficiaries of cash for clunkers last year, but this month's results are even worse than expected,” said Edmunds.com analyst Michelle Krebs. “Toyota still is suffering a hangover from its numerous recalls.”
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