Auto Industry Posts Best US Sales Of Year

4th UPDATE: Auto Industry Posts Best US Sales Of Year

The auto industry temporarily awoke from its slumber last month thanks to the U.S. government's "Cash for Clunkers" program, led by a 17% sales jump at Ford Motor Co. (F) and higher sales from Japan auto makers Toyota Motor Corp. (TM) and Honda Motor Co. (HMC).

Sales were jolted in the U.S. and foreign markets from government incentive programs promoting fuel-efficient cars, but a number of auto makers, including General Motors Co., Chrysler Group LLC and Nissan Motor Co. (NSANY) still reported lower sales.

The two largest Japanese auto makers - Toyota and Honda - reported single- digit increases as the clunkers program helped boost market share for some foreign auto companies. The Toyota Corolla, Honda Civic and Toyota Camry were the three most popular vehicles purchased under the program.

Toyota said Tuesday its vehicles accounted for 19% of sales within the program, saying "Cash for Clunkers" provided "tangible benefits" to the industry, as well as state and local economies.

Ford's gain was also helped by its trucks posting the first year-over-year sales increase in nearly three years. Meanwhile, Chrysler's 15% decline was in part due to a lack of inventory - most of the company's plants sat idle for almost three months as the auto maker dealt with its bankruptcy process.

"Cash for Clunkers," ended late last month, weeks earlier than expected, amid higher-than-expected consumer interest. The program, launched in late July, proved to be one of the fastest-acting stimulus programs to come out of Washington since the recession began, but higher sales in July and August are expected to be followed by weak demand in September.

Mike DiGiovanni, GM's sales analyst, said he expects the annualized selling rate to fall back to 10.5 million for the year from the mid-14 million vehicle range. He added that the auto maker expects the selling rate to jump to between 11.5 million and 12 million in 2010.

Ford's light-vehicle sales were 181,826. There were 26 selling days in August, one less than last year. Retail sales climbed 21% and Ford has gained retail market in 10 of the last 11 months. Despite a 13% rise in truck sales - the first since October 2006 - sport-utility vehicles continued to suffer with a 34% drop. Car sales jumped 25%.

GM reported 245,550 units sold, down 20%, as truck sales continued to slump, dropping 31%. Car sales declined 4.6%.

"We're very pleased with the sales performance in our Western region, where sales were up more than 41% compared with July," said Mark LaNeve, vice president of U.S. sales. He noted customers were responding to a pilot program it launched last month with online auction site eBay Inc. (EBAY). That effort will be extended through September.

For Toyota, sales were up 6.4%, to 225,088, topping Ford's total for a second straight month after three months of falling behind its U.S. competitor. Total passenger car sales were up 20%, while light-truck sales dropped 15%.

Honda posted a 9.9% jump, to 161,439 - the company's second-best month in the U.S. - as car sales grew 23% but truck sales dropped 9.3%. Nissan reported sales dropped 2.9% to 105,312, far better than projections, as car sales jumped 38% and truck sales slumped 48%.

Chrysler sales dropped 15% to 93,222 but rose 5% from July despite rapidly shrinking inventories.

And Hyundai Motor Co.'s (005380.SE) August sales surged 47% to 60,467 units, marking an all-time monthly sales record and the eighth-straight month of year- over-year retail increases. The company said its Alabama facility returned to a five-day work week and that inventories were being replenished.

Ford's shares were down 5.1%, to $7.21 in recent trading, amid a broad market decline, which was led by a drop in financials. American depositary shares for Toyota were down 0.8%, to $84.49, while Honda dropped 0.5%, to $31.19, and Nissan fell 9 cents to $13.86