U.S. auto sales boom; Hyundai, Ford gain ground

By David Bailey and Helen Massy-Beresford

DETROIT/PARIS (Reuters) - U.S. auto sales boomed in August as $3 billion in government incentives drove sharp gains for Hyundai Motor Co and Ford Motor Co but failed to provide a boost for General Motors Co in its first full month outside bankruptcy.

Ford reported a 17 percent jump in monthly sales on Tuesday and the success of the U.S. government's "cash for clunkers" trade-in incentives pushed overall industry sales to the first year-on-year increase in 21 months.

Korea's Hyundai posted a 47 percent increase as sales of its Elantra sedan more than doubled.

The U.S. government incentive program also helped Honda post a 10 percent sales gain while Toyota Motor Corp sales were up 6 percent.

The two U.S. automakers to have emerged from government-sponsored bankruptcies -- GM and Chrysler -- lost market share during the August sales bonanza.

GM sales dropped 20 percent, while Chrysler was off 15 percent. Nissan Motor Co sales fell almost 3 percent from record levels of a year earlier.

Meanwhile, auto sales rose in France and Italy and stabilized in Spain on the success of similar government-backed sales incentives, data released on Tuesday showed.

The now-exhausted U.S. "clunkers" program, which was inspired by the programs in France and other European markets, drove a rush into dealerships in July and 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.

On an annualized basis, industry-wide U.S. sales topped 14 million units, according to Autodata.

That was up from 13.6 million a year earlier but still far below the 16 million range that had been seen as the bottom for the market until 2007.

WINNERS AND LOSERS

The winners in the U.S. incentive program were Asian automakers and Ford, which benefited from a stronger lineup of smaller cars and crossover vehicles, analysts said.

The result has been a more evenly matched battle for sales among the major automakers in the U.S. market that threatens to upset long-held market share rankings.

Hyundai and its affiliate Kia Motors Corp now command a combined 7.5 percent market share, making them larger on that basis than Nissan Motor Co.