US sales of new cars hold up despite gloom

Sales of new cars held steady in many big markets last month, despite fears that the industry is heading into a new downturn.

Seasonally adjusted light-vehicle sales in the US were 7.5 per cent higher in August than a year ago, and just slightly below July’s 12.2m units

General Motors, America’s biggest carmaker, reported August sales that were 18 per cent higher than a year earlier. Don Johnson, GM’s vice-president for US sales operations, said: “Consumers are being cautious, but they are not retrenching.”

GM stuck to its current forecast for full-year vehicle sales in the US of 13m to 13.5m, albeit at the low end of the range. This translates to between 12.8m and 13.3m cars and light trucks.

Ford Motor’s August sales were 11 per cent higher than a year ago. Chrysler’s were almost a third higher, marking its best August in four years.

Chrysler overtook Toyota for the third time in the past four months. Toyota’s US sales were 13 per cent lower than August 2010 due mostly to supply shortages caused by the Japanese earthquake.

Car sales in France, Europe’s second-largest market, rose by 3.2 per cent in August, their first increase in five months, the industry association CCFA said.

In Spain, car sales were 5.9 per cent higher in August than a year ago, their first rise in more than a year. However, the Spanish industry association, Anfac, said that this amounted to “fictitious growth”, because car sales in August 2010 were at their lowest in more than 20 years.

The data marks the first snapshot of the industry since Europe’s sovereign debt crisis and America’s debt-ceiling ruckus and credit-rating downgrade sent world stock markets down sharply last month. In most countries, August is typically one of the slowest months for car sales.

The car industry is still recovering from a deep downturn in 2008 and 2009, which forced governments around the world to offer scrappage subsidies or low-interest bail-out loans in order to keep carmakers afloat.

Most of the research groups that study the car market have cut their sales forecasts for 2011 and 2012 over the past month because they expect weaker consumer confidence or a possible “double dip” recession in some big markets.

Demand for cars, a high-cost good whose purchase can usually be deferred, is widely seen as an indicator of broader consumer sentiment.

In Japan, sales of new cars, not including mini-vehicles, fell by 25.5 per cent last month from the previous year, the Japan Automobile Dealers Association said. The decline reflected in part the disruption from the March earthquake and tsunami and government subsidies that were in place a year ago and that artificially lifted car sales.

Maruti Suzuki, India’s top-selling carmaker, reported an 18 per cent drop in August sales on a year ago. The company blamed the drop on disruption to production at its Manesar plant near New Delhi.