PREVIEW-US auto sales in September slump post-'clunkers'

* What: U.S. September auto sales

* When: Thursday, Oct. 1, starting at about noon ET

* Annualized rate seen falling back toward 2009 low

* Median forecast: 9.5 mln unit annualized sales rate

By David Bailey

DETROIT, Sept 28 (Reuters) - U.S. auto sales likely fell in
September back to the nearly three-decade lows of early 2009
without government incentives to spur buying, leaving in doubt
the timing and pace of a recovery for the battered industry.

Nearly 700,000 new cars and trucks were bought by U.S.
customers through the government "cash for clunkers" incentive
program from late July through the first three weeks of August,
a leap from recession-stunted sales earlier in 2009.

The massive jump in buying versus earlier in 2009 depleted
the stores for all the major auto manufacturers, leaving
industry inventories at historically low levels.

Major automakers made sharp production cuts due to the
economic downturn in general. Chrysler, now under management
control of Italy's Fiat SpA (FIA.MI), and GM, also broadly
halted output around their restructurings in bankruptcy.

The exhaustion of the government incentive program and a
dearth of key vehicles at dealerships curtailed activity at
many dealerships through the first half of September, but there
have been some signs of sales improving late in the month.

"We have started to get little rumblings that maybe the
consumer isn't quite so flat on their back, that they have been
responding to some of the incentive programs and the fact that
leasing is coming back," said Rebecca Lindland, an automotive
research director at IHS Global Insight.

Lindland said the General Motors Co [GM.UL] 60-day return
guarantee program has attracted consumer attention, Chrysler's
return to leasing earlier in September should provide support
and other automakers have brought back some incentives.

"There are some little tiny slivers of hope," she said.
"There are still a lot of obstacles out there," she said. "I
think we are still going to see the hangover from 'cash for
clunkers' both in September and almost potentially through the
end of the year."

SALES DROPS AT ALL MAJOR AUTOMAKERS

U.S. auto industry sales rose 1 percent to more than 1.2
million vehicles in August from a year earlier under the
"clunkers" program, the first time monthly sales pierced the 1
million mark in a year.

However, none of the largest manufacturers are expected to
post sales gains in September, and Edmunds has forecast a 23
percent industry sales decline for the month.

Edmunds expects Ford Motor Co (F.N) to post a 9.7 percent
sales drop, GM a 46.1 percent drop and Chrysler a 48.7 percent
decline among the Detroit automakers.

Edmunds expects Toyota Motor Corp (7203.T) to post a 9.7
percent sales decline, Honda Motor Co Ltd (7267.T) an 8.3
percent drop and Nissan Motor Co Ltd (7201.T) a 1.1 percent
drop among Japan-based automakers.

The August sales gain represented a seasonally adjusted
annualized rate of 14.1 million vehicles, but did little to
turn the tide on annual sales. U.S. auto industry sales were
down nearly 28 percent through August 2009 versus last year.

Global Insight expects U.S. September auto sales to come in
at a 9.33 million seasonally adjusted annualized rate, or well
below the 12.5 million unit rate from a year ago when credit
markets froze in the wake of the Lehman Brothers collapse.

The median forecast for U.S. auto industry sales was 9.5
million vehicles from 41 economists surveyed by Reuters, while
J.P. Morgan believes the annualized rate could drop to 8.9
million vehicles -- the lowest month since December 1981.

"We continue to believe (the monthly annualized rate) will
hover around 9 million through year-end, but we remain
confident in a gradual recovery in the first half of 2010 given
strong evidence of a bottoming pre-clunkers," J.P. Morgan
analyst Himanshu Patel said in a note to clients on Monday.

Influential industry forecaster J.D. Power and Associates
expects a 9.2 million vehicle annualized sales rate, but
believes improving consumer confidence and credit conditions
could rebuild retail sales in the coming months.
(Reporting by David Bailey, editing by Matthew Lewis)