September 3, 2008 / 6:30 PM / 11 years ago

UPDATE 1-GM August sales fall 20 percent amid incentives

(Adds detail on sales decline, production forecast, company comments)

DETROIT, Sept 3 (Reuters) - General Motors Corp (GM.N) on Wednesday posted a 20 percent drop in August sales as more aggressive discounting on its 2008 line-up headed off the even-deeper decline some analysts had forecast.

GM sales of light trucks, including pickup trucks and sport utility vehicles, fell 24 percent in August from a year earlier while sales of cars dropped about 14 percent.

But supported by an employee discount offer rolled out in late August, the struggling U.S. automaker still posted its best single-month tally of a bleak 2008 in August by selling 308,817 vehicles.

Analysts’ forecasts for GM’s August U.S. sales had ranged from a decline of 19 percent to a decline of 37 percent compared with the same month a year earlier.

High gasoline prices and a collapse in resale values for pickup trucks and SUVs have cut deeply into demand for trucks in recent months, but GM said that downturn appeared to ease in August as retail gas prices retreated.

“With the recent moderation in fuel prices, we’re seeing some relaxation of pent-up demand in pickups and utilities,” GM’s North American sales chief, Mark LaNeve, said in a statement.

GM said it planned to cut third-quarter production by about 10 percent from year-earlier levels, even after adding output of 76,000 cars in response to stronger demand for more fuel-efficient vehicles.

The automaker also said it would cut fourth-quarter production by about 16 percent from a year earlier.

Production forecasts are closely watched as a gauge of demand for auto parts suppliers and as an indication of revenue for the automakers, who book sales when cars and trucks are shipped to dealers.

Earlier on Wednesday, GM said it would extend its employee-pricing promotion through September. The offer covers nearly all of its 2008-model-year vehicles and will include some 2009-model-year vehicles this month as well. (Reporting by David Bailey and Kevin Krolicki; Editing by Braden Reddall)

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