Major automakers posted mixed U.S. sales for August on Tuesday, as executives cautioned the embattled industry was facing reverberations from a weaker housing market and the shakeout in subprime lending.
General Motors Corp, the No. 1 automaker, bucked the downtrend with a 5 percent sales gain, but attributed some of its improved result to more aggressive discounting of its full-size pickup trucks.
Rivals Ford Motor Co, Toyota Motor Corp and Chrysler LLC all posted sales declines, putting industrywide U.S. sales on track to extend a slump that took hold in the second quarter.
Among the top six manufacturers, Honda Motor Co and Nissan Motor Co Ltd posted sales gains that were accompanied by higher incentives in the face of the slack overall market.
Toyota, which remains on track to overtake Ford as the No. 2 automaker in the United States this year and to top GM in global terms, saw its U.S. August sales fall almost 3 percent.
That marked the second consecutive monthly sales drop for Toyota, the first such decline since early 2003 for the fast-growing Japanese automaker.
Reduced credit tied to the subprime squeeze challenged consumer confidence this month, Jim Lentz, Toyota's U.S. sales chief, said in a statement.
Toyota still expects to post U.S. sales growth of between 5 percent and 7 percent this year, even though overall U.S. auto sales are now widely expected to fall to their lowest level since 1998.
Ford posted a 14 percent drop in U.S. sales, a decline in line with cautious Wall Street expectations.
Chrysler LLC said its sales were down 6 percent in its first month as a privately held automaker.
Nissan reported a 6 percent sales increase for August, boosted by stronger results for its flagship Altima sedan, but echoed concerns that a weakening economy was adding to the pressure on the auto industry.
Something's obviously going on in the industry. Someone who says there's not an impact is probably wrong, Nissan's U.S. sales chief Mark McNabb told Reuters.
Honda's sales were up almost 5 percent, lifted in part by stepped-up incentives intended to clear out inventory of older model Accord sedans in advance of the launch of a redesigned version of the car.
GM SETS PRODUCTION TARGET LOWER
Citing the outlook for a slowing U.S. economy, GM set lower production targets for the second half of the year.
GM, which cut production of its Chevrolet Silverado and GMC Sierra pickup trucks last month, cut its third-quarter production plan by 2 percent and set fourth-quarter production 10 percent lower than a year earlier.
GM sales analyst Paul Ballew said the U.S. economy now appeared on track for growth of less than 2 percent this year and only modest improvement in 2008.
For us, it certainly constitutes a challenging backdrop, Ballew told reporters and analysts on a conference call.
Ford said its sales decline reflected a continuing strategy of throttling back on low-margin sales to rental agencies. That category of Ford's sales fell 44 percent in the month.
Ford also said industrywide results were being hurt by a weaker housing market and an increased wariness about big-ticket purchases, particularly in lower-income households.
The uncertainty surrounding the current situation is quite substantial, Ford economist Ellen Hughes-Cromwick said on a conference call with analysts and reporters.
J.P. Morgan analyst Himanshu Patel said industrywide sales for August were tracking at 16.1 million vehicles on an annualized rate, down from 16.2 million a year earlier.
That estimate was based on sales results from automakers representing over 80 percent of the U.S. light vehicle market. A final accounting of the industry's overall sales rate was expected to be available later Tuesday.