RPT-WRAPUP 4-US Aug auto sales boom but clunker hangover looms

* U.S. auto sales boom in August, depleting inventory
* Biggest winners from "clunkers" are Asian automakers, Ford
* Sales up in France, Italy; stable in Spain
* France to extend scrappage incentive into 2011
(Recasts with details from U.S. program, Chrysler results,
changes dateline from MADRID/PARIS)

By David Bailey and Helen Massy-Beresford

DETROIT/PARIS, Sept 1 (Reuters) - U.S. auto sales boomed in
August as consumers burned through $3 billion in government
incentives, leaving automakers to contend with both inventory
shortages and uncertain demand in the months ahead.

Major automakers were set to report final sales figures for
August later on Tuesday, but the success of the U.S.
government's "cash for clunkers" trade-in incentives stoked
expectations that industry-wide monthly sales could see the
first gain since October 2007.

Meanwhile, France saw a 7 percent gain in August car sales
and the French government said it would continue to fund its
program to encourage consumers to swap out of old cars into
2011. [ID:nPAB007876] [ID:nL1652516]

The now-exhausted U.S. "clunkers" program, which was
inspired by the programs in France and other European markets,
drove a rush to dealerships in late July and the first three
weeks of August.

More than 690,000 vehicles were scrapped in the United
States for taxpayer-funded credits of up to $4,500 as consumers
took advantage to drop gas-guzzling trucks and SUVs.

The biggest winners in the U.S. sales bonanza were major
Asian automakers and Ford Motor Co (F.N), which benefited from
a stronger lineup of smaller cars and crossover vehicles.

Ford, Toyota Motor Corp (7203.T) and Honda Motor Co
(7267.T) were expected to post double-digit percentage
increases in monthly sales.

But the short-lived sales rush also ran down dealer
inventories of popular vehicles like the Toyota Corolla, Honda
Civic and Ford Focus and raised the risk of an equally abrupt
drop in demand in September and the remainder of the year.

Chrysler, the first major automaker to report U.S. sales,
saw a 15 percent fall in August. The company, now under control
of Italy's Fiat <FIA.MI, lost potential sales when dealers ran
short on some models after it shut down all of its production
during a bankruptcy process that ended in June.

Chrysler said it would offer cash rebates of up to $4,500
or zero percent financing on 2009 models and $2,000 cash
rebates on select 2010 model year vehicles in September in
advance of an expected renewed slump in overall sales.

FRANCE AIMS FOR A SOFT LANDING

In Europe, carmakers have called for a gradual phasing out
of government-funded sales incentives to prevent abrupt sales
declines when the programs end.

French Economy Minister Christine Lagarde said the program
there would continue for another two years in 2010 and 2011.

"As successful as it has been ... we need to be successful
in pulling out," she told Reuters. "We are looking at two
fiscal years to make it truly gradual."

For August, France's biggest carmaker, PSA Peugeot Citroen
(PEUP.PA), saw a 17 percent increase in group sales in August.
Renault (RENA.PA) group sales rose 11 percent.

Spanish car sales stabilized in August after 16 months of
consecutive declines. Spain launched a 200 million euro ($429
million) subsidy plan. Car sales for Germany, Europe's biggest
market, are due on Wednesday.

In Japan, sales fell 0.5 percent. [ID:nTKC003457]
[ID:nTKG006480]

In Korea, Hyundai gained more ground. Hyundai Motor
(005380.KS) sales climbed 25 percent and affiliate Kia Motors
Corp's (000270.KS) sales were up 4 percent.

But GM Daewoo unit, which is seeking new financing from the
state-backed Korea Development Bank, posted a sales decline of
almost 23 percent. [ID:nSEL000754] [ID:nSEL000753]
(Reporting by Shin Jieun, Jason Webb, Devidutta Tripathy,
Crispian Balmer, David Bailey and Soyoung Kim; Writing by Helen
Massy-Beresford; Editing by Will Waterman, Patrick Fitzgibbons
and Matthew Lewis)