US auto sales plummet in August

The embattled US auto sector recorded one of its worst months on record in August, as General Motors, Ford and Toyota all saw American sales tumble.

The sector posted the worst August sales figures in 27 years, weighed down by the expiry of a popular government cash-back scheme designed to boost sales.

Only Chrysler - long seen as the sector's weakest link - managed to see an increase in the number of cars driven off the forecourt.

The company boasted a seven percent rise in sales to 99,611 vehicles compared to 93,222 units last August, marking the fifth consecutive month of year-over-year sales increases.

Elsewhere the picture was as bleak as a Detroit winter.

GM reported a nearly 25 percent slump in sales in what is normally a busy month for auto firms.

"Last year's cash-for-clunkers program spiked industry sales in 2009, so results this August were not surprisingly a bit mixed," Don Johnson, GM's vice-president for US sales operations, said in a statement.

President Barack Obama's administration introduced the scheme in July 2009 in an attempt to boost sales as the country and the auto sector struggled to emerge from a brutal recession. The program expired on August 26, 2009.

GM sold 185,176 vehicles last month against 246,479 last August in a decline that was also blamed on the shutdown of its Saturn, Pontiac and Hummer brands and the sale of Saab last year as part of the automaker's drastic restructuring following a massive government bailout.

Sales for GM's remaining four brands - Chevrolet, Buick, GMC and Cadillac - were down seven percent from July and 11 percent from a year ago.

GM nevertheless said that sales of pickup cars and utility vehicles had risen last month.

In a phone briefing, Johnson said that "we know it is going to be a modest recovery and that it is going to get bumpy."

That sentiment was echoed at Ford, which reported a nearly 11 percent sales drop, with its three brands - Ford, Lincoln and Mercury - selling a total 157,503 vehicles in August compared to 176,323 a year ago.

"Sales were lower than expected," said Ken Czubay, Ford's US sales chief.

Japanese car manufacturer Toyota was not immune: the world's largest car maker also said its US sales plunged over 31 percent to 148,388 vehicles in August compared with 225,088 last year.

Analysts warned the near sector-wide drop in demand also signaled cautious consumer spending amid a slowing US economic recovery.

"We saw really big declines in brands that did particularly well in the cash-for-clunkers," said Michelle Krebs, senior analyst at Edmunds.com.

"Still, there is a reluctance by the consumer to buy new cars, we thought we'd be ahead of where we are at this point... vehicle sales are not strong compared to their normal level" before the 2008 economic slump, she told AFP.

"It is hard to imagine the jobless rate and the consumer confidence improving enough to push sales a lot higher."

According to another Edmunds.com analyst Karl Brauer, "the same factors depressing the recovery in the auto sales over the past year are likely to continue for the foreseeable future."

Sales would likely be restricted to around 12 million cars per year, he said.

Despite the negative figures, there remain some glimmers of light for an industry that was on the brink of collapse before the government bailout.

GM last month took a key step in its efforts to free itself from government ownership when it filed for a sale of its shares in the stock market.

The US government today holds 61 percent of GM, the largest of the Detroit Three automakers, after a massive infusion of taxpayer money last year saved the automaker from bankruptcy.

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