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Auto Sales Still Stuck in Second Gear
777Date: Thursday, 28 Oct 2010, 16.52 | Message # 1
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The "Cash for Clunkers" program stuck a bandage on a mortally wounded auto industry last summer. Now the bandage is off, but the boo-boo underneath still looks pretty nasty.

August car sales showed that until middle-class Americans really get back to work and feel good about their prospects, any return to the good old days of booming car sales -- fueled in part by runaway home values and easy credit -- is wishful thinking.

Auto manufacturers saw August sales fall 21 percent, compared with the same month last year. That’s when dealers were getting carpal tunnel syndrome from writing Cash for Clunkers paperwork as old Explorers and Grand Cherokees guzzled their last, replaced by shiny, high-mileage Civics, Corollas and Focuses. After that new-car blowout, everyone expected a hangover during the same time frame this year -- but no one expected it to be nearly this bad.

Major automakers were hammered with double-digit sales drops in August, compared with the same period last year, including Toyota, down 34.2 percent; General Motors, 24.5 percent; Honda, 32.7 percent; and Nissan, 27.0 percent. Ford was off 11 percent, and Chrysler actually saw a 6.9 percent increase, though that’s deceptive given that Chrysler was one of the worst performers in Clunker-rebate sales last year. One other blip: Luxury cars continued to stage their comeback, with Audi sales up 14 percent, Mercedes up 13 percent and Porsche up 33 percent.

With consumers resisting summer sales, the numbers clarified that people aren’t in the mood, or financial shape, to run out and buy a new car. Auto sales had been steadily rebuilding this year from the lowest levels in nearly 30 years, and the industry is still chugging toward about 11.4 million car sales this year, which would be 1 million more than last year. But the glass-half-full perspective is clouded when you recall that only a few years ago, the industry was routinely topping 16 million cars a year, and more than 17 million in its best years.

As ever, there were bright spots in the numbers. The shiniest of all is the all-new Hyundai Sonata sedan, whose sales boomed 81 percent in August. The Sonata delivers eye-catching styling, recession-friendly pricing and a class-leading punch of power and economy: 200 horsepower with 35 mpg from a 2.4-liter 4-cylinder engine. Riding a wave of positive press, the Sonata, with 21,399 sales in August, easily outsold every Detroit midsize sedan and barely trails the Honda Accord -- though the Toyota Camry still easily led the pack with nearly 31,000 sales.

Some analysts have been surprised by the strength of full-size truck sales. In August, the Dodge Ram jumped 8.5 percent, with Ford’s stalwart F-Series and Chevy’s Silverado both up about 5 percent. Those numbers are bolstered by the fact that big trucks weren’t eligible for last August’s Cash for Clunkers rebates. But I’m not at all surprised that trucks are holding their own; suburban cowboys may not be buying as many half-ton pickups, but these vehicles are the irreplaceable heart of the working man's business. And when tens of millions of people depend on a pickup truck for work, there’s a point where you have to replace an older model with a new one. As ever, the Ford F-Series continues to be America’s best-selling vehicle.


 
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