August sales had every reason to fizzle … but didn't

Surprise!

Sales of new cars and light trucks did not go to hell in a hand basket in August, as many had expected. There was every reason for sales to fizzle, but they didn't. Sales weren't great, but they were better than last year's and better than July's.

Remember early August? Congress fiddled and fussed for a month before passing a debt extension measure that pleased nobody. Standard and Poor's shook its statistical head in disgust and reduced the United States' debt rating.

Wall Street reacted in true Wall Street fashion. It panicked. It flittered and fluttered -- down, up, sideways, up, sideways, down. Like Washington Irving's headless horseman, Wall Street rode off in all directions.

Bankers covered their eyes, their ears, their mouths -- "see no evil, hear no evil …" -- they sat on their meager or major piles of pennies and dollars and brushed aside any businessperson who was brash enough to think of a loan for expansion. Americans lost some $3 trillion of their personal wealth in a couple days. IRA accounts took an $18 billion drubbing.

Better than July

So new-vehicle sales should have collapsed. Instead, at 1,072,379, they were 8 percent better than last year's. That's hardly whoopee material. Sales in August 2010 were frightful.

More important, August sales snapped a four-month string of month-to-month declines. Deliveries were up 1.2 percent over July. Slim pickin's … but every little bit helps.

Automotive News has predicted 12.6 million sales this year. It would require an average of 1,033,704 in each of the remaining four months. That would be 5.3 percent higher than last year's September-December average. For the first eight months of 2011, sales were up 11 percent.

The industry should be able to sustain its current rate of sales. A full-year total of 12.6 million would be 8.6 percent better that last year's anemic 11.6 million.

Perspective on those numbers cuts two ways. That 11.6 million was a heckuva lot better than the recession low of 10.4 million in 2010. And 12.6 million would be eons short of the average of 16.9 million a year for 1999-2007, the industry's Golden Years.

After topping 13 million in February, March and April, the seasonally adjusted annual rate of sales was 12.1 million in August.

Detroit gains share

The Detroit 3 had 48.5 percent of their home market in August with each company reporting a gain. The share was up 4.2 percentage points from last year. The improvement reflected stronger sales by the domestic makers plus the losses sustained by Japan-based manufacturers as a result of the earthquake and tsunami in northern Japan last March.

The Japanese are returning to full production, but it will be a few months before dealer stocks are back to normal.

In August, General Motors reported a gain of 1.8 points in make share; Ford Motor was up half a point, and Chrysler Group added 1.9 points. On the other side of the ledger, Toyota Motor Sales (Toyota-Scion-Lexus) was down 2.8 percentage points and American Honda (Honda-Acura) lost 3.2 points.

Ford division topped Chevrolet by 14,000 sales in August and extended its lead to 160,000 for eight months. The next five spots on the eight-month chart are occupied by import-badged brands: Toyota, Honda, Nissan, Hyundai and Kia. Rounding out the Top 10 are Dodge, Jeep and GMC.

John K. Teahen Jr. - Automotive News