* More evidence that U.S. economy is gathering momentum
* Sales robust despite lack of inventory for some automakers
* Toyota again beats out Ford to rank No. 2 in U.S. market
* Shares of Ford, GM up sharply
(Adds final industry figures, analyst and industry comments,
macroeconomic background, updates share prices)
By Bernie Woodall and Ben Klayman
DETROIT, Sept 4 Even as dealers sold out of some
of the hottest models, U.S. auto sales raced past expectations
in August, rising at their fastest pace in nearly six years,
while demand showed no signs of cooling as consumers grew more
confident in the economy.
Vehicle sales increased 17 percent in August, and the annual
sales rate in the month finished at 16.1 million vehicles. That
sales pace topped analysts' expectations of 15.8 million and
marked the strongest month since October 2007, before the start
of the 2008-2009 recession.
Sales easily surpassed expectations as consumers, after
years of putting off purchases of new cars, took advantage of
still-low interest rates and snapped up a wide range of vehicles
from pickup trucks to luxury sedans.
Overall retail sales for August, due to be reported in the
middle of the month, are currently forecast to have risen 0.3
percent from July, but the robust auto sales could indicate the
current estimates are too conservative.
The auto industry has held up a bit better than the broader
economy, in part because consumers need to replace aging
vehicles after deferring purchases in recent years. On average,
vehicles are more than 11 years old, a record.
"People are just tired of waiting," Fred Diaz, U.S. sales
chief for the Nissan brand, said on Wednesday. "They need new
transportation, and they're feeling confident about the jobs and
secure about their careers."
That said, the unexpected strength of August auto sales
provides more evidence that the broader U.S. economy is
gathering momentum coming out of the first half, when gross
domestic product grew by a tepid 1.8 percent.
Mustafa Mohatarem, chief economist at General Motors Co
, said the robust sales pace in August "reflects the
underlying fundamentals of the economy."
The industry benefited from the pent-up demand even though
persistent inventory shortages of some models came to a head in
August, traditionally a strong sales month driven by
end-of-model-year clearance sales.
In a survey by RBC Capital Markets, 19 percent of dealers
said inventory was too low during the month of August, compared
with 9 percent of dealers in July and 4 percent in June.
Dealers could not keep pace even though many manufacturers
were running their plants flat-out. Ford Motor Co said it
is operating its North American plants at 135 percent of
capacity, and six of its factories are running on three shifts.
Among the models in short supply were the Ford Fusion sedan
and its Escape crossover, and GM's Chevrolet Cruze, Spark,
Impala and Malibu.
All major automakers reported double-digit sales increases
in August, with most of them handily exceeding analysts'
GM, the No. 1 seller in the U.S. market, reported August
sales up 15 percent.
Chrysler Group LLC and Ford each said their August U.S.
sales rose 12 percent. Both automakers reported that pickup
truck models led the way, in part because of the rising housing
market. Ford's sales outstripped analyst expectations and
Chrysler's matched them.
The three largest Japanese automakers in the U.S. market
posted much stronger than expected sales.
Toyota Motor Corp's August sales gained 23 percent.
For the second straight month, the top Japanese maker sold more
vehicles in the United States than Ford, ranking Toyota No. 2
behind GM. Before July, Toyota had not topped Ford in monthly
sales since March 2010.
Honda Motor Co sold 27 percent more vehicles in
August than last year, and Nissan Motor Co sales rose
"The auto industry continues to be a bright spot in the
economic recovery," said Bill Fay, Toyota division group vice
president and general manager.
Sales are expected to stay strong through the end of the
year, most automakers said.
Vehicle sales have been growing as a proportion of overall
retail sales in recent months.
From a post-financial crisis low of 14 percent of all retail
sales in September 2009, auto sales more recently have accounted
for about 17.5 percent of retail sales. Still, it is a far cry
from the peak of a decade ago when auto sales typically
represented more than 22 percent of all retail sales.
Michigan-based LMC Automotive expects this year's U.S. sales
to finish at 15.6 million vehicles, which would mark a 7.6
percent gain from 2012.
A second bright spot for the industry is the rise in average
transaction prices for new vehicles, which climbed to a record
$31,252 in August, said TrueCar.com, the California-based
Incentives across the industry fell in August, to an average
of $2,374 per vehicle from $2,455 in July, according to industry
research firm Edmunds.com.
The demand for luxury vehicles remains high, as seen by the
46 percent sales gain by BMW, which coming into August
was just behind Daimler's Mercedes-Benz as top luxury
brand automakers. Mercedes-Benz said its August sales rose 16
Citi analyst Itay Michaeli said the industry is only at the
beginning of satisfying pent-up demand.
Jesse Toprak, analyst with TrueCar.com, said consumers are
attracted to showrooms now because of low monthly payments and
"the best lease deals ever."
Toprak said he expects the robust sales rate to continue
through the end of 2013, and expects fourth-quarter sales to be
the strongest of the year.
GM's Mohatarem also said that the sales pace will not fade
as the year nears an end.
But Alec Gutierrez, an analyst with Kelley Blue Book, said a
shortage of some key models will put a crimp in sales growth for
the rest of the year into 2014.
"I don't know if we're going to have the inventory available
to have the same kind of growth that we saw this month," he
Ford sales analyst Erich Merkle said the auto industry will
show a 17 percent U.S. sales gain for August, and a seasonally
adjusted annualized selling rate of more than 16 million
Before the 2008-2010 industry downturn, it was routine for
U.S. auto sales to top 16 million vehicles each year. In a
10-year span ending in 2007, U.S. auto sales averaged 16.7
Pickup truck sales remained strong in August for the major
U.S. automakers, continuing a trend that began almost a year
Ford said it sold 71,115 F-Series pickup trucks, up 22
percent, which matches the line's year-to-date gains.
GM's Chevrolet Silverado pickup truck sales rose 14 percent
and through August increased its year-to-date sales 25 percent.
Chrysler's truck brand, Ram, showed a robust 29 percent
sales gain in August, and had a year-to-date gain of 25 percent
through August. Chrysler is a unit of Italy's Fiat SpA.
Bucking the upward industry-wide trend, Volkswagen AG
said its sales were down 1.6 percent in the month.
Ford shares were up 3.3 percent at $16.88 and GM shares were
up 4.9 percent at $35.81 on the New York Stock Exchange shortly
before the close of trading on Wednesday.
(Additional reporting by Deepa Seetharaman in Detroit; editing
by Gerald E. McCormick, Matthew Lewis and Phil Berlowitz)