DETROIT – Detroit automakers, led by a stalling General Motors Corp. (GM), posted weak U.S. sales for August Thursday as heavily publicized discounts that delivered near-record July results lost their punch.
Shares of the traditional Big Three automakers weakened, meanwhile, on fears higher gasoline prices stemming from damage to oil infrastructure caused by Hurricane Katrina (search) on the U.S. Gulf Coast will sap future demand for vehicles.
Big and fuel-thirsty pickups and sport utility vehicles, accounting for most of the automakers' profits, are especially vulnerable, analysts say. Stock in General Motors and Ford Motor Co. (F) fell about 3 percent on the New York Stock Exchange.
Sales of new cars and trucks at GM, which is riding out a deepening financial crisis, were down 16.6 percent from the same month a year ago.
Meanwhile, Ford and the Chrysler unit of Germany's DaimlerChrysler (DCX) said sales were up modestly. Ford posted a 3 percent gain, while Chrysler's sales rose 1 percent.
The August results paled in comparison with July when sales at GM rose 19 percent, and Ford and Chrysler both finished up more than 30 percent.
All sales figures are adjusted for one more selling day in August this year and exclude foreign brands and some heavy trucks at GM and Ford.
In sharp contrast to Detroit's results, Honda Motor Co. Ltd. (search) said sales jumped nearly 19 percent, making August its best sales month ever. Toyota Motor Corp. and Nissan Motor Co. Ltd. both said their August U.S. sales rose a robust 11 percent.
Gasoline prices were already high before Katrina struck and many of the domestic big pickups and SUVs, such as GM's Yukon or massive Hummer H2 (search), saw sales decline more than 30 percent in August.
Vehicle sales across the industry came in at a seasonally adjusted annual rate of 16.8 million vehicles in August. That was down from a near-record annual rate of 20.7 million vehicles in July.
GM extended a program last week under which it has been selling new cars and trucks to the general public at the same low price offered to employees through Sept. 30.
On Thursday, Ford said it too was extending the employee pricing incentive through the end of the month. A similar program at Chrysler will continue until Oct. 3, the company said.
Mark LaNeve, GM's vice president for vehicle sales, service and marketing in North America, said the company's poor showing for August was expected because exceptional results in June and July left dealers short of new vehicles.
Consumer fatigue with employee pricing deals also appeared to work against the Big Three.
"Even as the impact of employee pricing wanes and pump prices climb, the industry presses ahead on the strength of new products," said Jim Press, president and chief operating officer of Toyota's U.S. unit.
Detroit's discount programs have been cited as a factor squeezing automakers' profits. But analyst David Healy of Burnham Securities says aggregate prices available from the programs were no lower than those given through cash rebates and other incentives available earlier.
The employee pricing scheme worked in June and July, he said, because car buyers liked the "no-haggle, fixed price" deals.
According to a report Thursday by Edmunds.com (search), an online source of information about the U.S. auto industry, incentive spending by Detroit's automakers decreased in August from July levels.
In a modest positive for GM, the world's largest automaker said it was raising fourth-quarter North American vehicle production by 2 percent over the year-ago quarter.
It also raised expected third-quarter production by 3 percent over a previously announced target. Production levels are key because U.S. automakers book profits on vehicles when they are shipped from assembly plants, not when they are sold off dealer lots.