The U.S. auto industry showed a 1% sales gain to produce 1.3 million vehicles in August. It was the first annual sales gain since October 2007. Sales of cars and light trucks surged 30% compared to July.

The spike in sales was solely attributed to the Cash for Clunkers program launched by the U.S. government in late July. The program allowed consumers to trade in their old gas-guzzling cars and trucks with a mileage of 18 miles per gallon or less for a value of up to $3,500–$4,500.  As many as 690,114 new cars were sold under the program.

Toyota (TM), Honda (HMC) and Ford (F) were the largest beneficiaries of the program with their fuel-efficient lineup of vehicles.

Toyota Motor sales advanced 6.4% to 225,088 units, largely due to its best-selling model on the Cash for Clunkers buy list – Corolla. Honda Motor sales went up 9.9% to 161,439 units, helped by models such as Civic, Accord and Fit.

Ford Motor revealed a 17% rise in sales to 181,826 cars and light trucks. Two models – Focus and Escape SUV, which are ranked fourth and tenth, respectively, on the top-10 buy list  – heated up the company’s sales. Sale of the Focus increased 56% while that of the Escape shot up 49%.

Sales were lagging behind for Nissan Motor (NSANY), Chrysler and General Motors, although their high-mileage vehicles performed relatively well compared to other months of the year.

Sales at Nissan Motor dipped 2.9% while Chrysler fell 15% due to lower supplies of fuel-efficient vehicles. Sales at General Motors slipped 20% to 245,550 vehicles. The company’s vehicles such as Chevrolet Aveo subcompact, the Cobalt sedan and Equinox crossover benefited from the Cash for Clunkers program. Although none of the GM vehicles made the top-10 buy list, the company’s share of Clunker purchases were second only to Toyota Motor.

Despite the commendable August sales, fears loom about the sustainability of the rejuvenation in sales as the Cash for Clunkers program has expired. Speculation is rife that overall auto sales will retract back sharply and demand will swing back to traditional levels in September. Are automakers ready to offer a new round of rebates and low-cost financing to bolster the sales gain?
Read the full analyst report on “TM”
Read the full analyst report on “HMC”
Read the full analyst report on “F”
Read the full analyst report on “NSANY”
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