More Auto Deals as August Auto Sales Solid - Rebates, Cheap Financing To Continue

SAN FRANCISCO Sept. 3, 2003; August Cole writing for CBS Marketwatcg reported that General Motors and Chrysler Group will extend cash rebates and low interest rate financing as the industry reported August U.S. sales on Wednesday that show demand held up throughout the summer.

Though lower than last year's record pace, industry sales for the month tally up as among the strongest of the year after a season of searing discounts. A similar story played out in July when total results were lower than last year but the month was the strongest of 2003.

But the biggest rivals of the U.S. automakers, Toyota and Honda, reported a record month without the same emphasis on discounts and deals.

"There is no question that consumer demand for autos ... is increasing as we progress through the year," said Ford Motor sales spokesman George Pipas. Most automakers have expected an improving U.S. economy to help sales toward the end of the year.

Rival Toyota echoed those comments after reporting its best month ever in the U.S. "The rebounding economy was evident in the overall strength of the auto market in August," said Toyota Motor Sales COO Jim Press. "The economic upturn will continue to fuel sales as we approach the fourth quarter."

Shares of the biggest automakers were mixed. GM rose 13 cents to $42.61 while Ford Motor fell 37 cents, or 3 percent, to $11.94. U.S.-listed shares of Chrysler parent DaimlerChrysler rose 31 cents to $39.63. Honda Motor added on 6 cents to $20.73 and Toyota Motor advanced $1.42 to $58.52.

More deals

To keep buyers interested in new cars at a time when the labor market looks soft, GM's current promotions will run through Jan. 2, 2004, providing a lift to sales of 2003 models as the newer 2004 versions arrive on dealer lots. But even the new full-size pickups and SUVs like the TrailBlazer EXT and the GMC Envoy XL will get $500 bonus cash through Sept. 30.

The automakers have also become very judicious about where they assign the deals. Many discounts are targeted to help a certain vehicle line if sales are a concern to executives. The 2003 Chevrolet S-10 will even carry $4,000 cash rebates.

"Our September program will help us close out the 2003 model year strong, help GM maintain its strong retail performance through the balance of the year and position us well for 2004," said GM North America sales executive John Smith.

Chrysler Group already announced on Tuesday that Chrysler brand, Dodge and Jeep will get discounts on 2004 models because 2003s are selling quickly.

August results

GM said that U.S. sales in August were 0.5 percent lower than last year at 472,427 units. Truck sales rose 5 percent while car sales fell 8 percent. The world's biggest automaker cited weaker sales to corporate and rental car customers.

Sales of luxury brands Cadillac, Hummer and Saab rose while the volume leader Chevrolet saw sales rise 5.8 percent to 266,756 units.

Ford Motor said that August U.S. sales for its entire stable of brands fell 15 percent to 311,084 from last year as car sales fell 28 percent. Truck sales fared better against last year's record month, down 7 percent as the company awaits the showroom debut of its new F-150. So far this year, sales are down 5 percent.

The company did sell more cars than last month. Ford and Lincoln brand sales fell while premium lines Jaguar and Land Rover reported record sales. For the third quarter, production estimates came down by 10,000 to 800,000 because last month's power blackout affected manufacturing.

Toyota Motor Sales said August U.S. sales increased 11 percent from last year to 200,482 vehicles. Total car sales increased 5.2 percent and light truck sales rose 19 percent. Toyota brand sales rose 11 percent to 174,072 vehicles while Lexus sales rose almost 14 percent to 26,410.

Honda's U.S. arm said that sales of Acura and Honda vehicles were a record in August. For the month, sales rose 12 percent to 147, 253 vehicles. For the Honda brand, strong SUV sales pushed the monthly total to a record of 131,049. Acura sales rose 2.9 percent to 4,964.

"What's most important is that we've broken our sales records with practically no incentive spending," said American Honda Motor executive Dick Colliver.

Nissan North America said that August sales rose 14 percent for the month. Nissan-badged vehicles rose 8.3 percent while Infiniti sales jumped 59 percent from last year because of the introduction of the FX45 and the G35 coupe.

Mitsubishi sales fell 9.1 percent but it was the strongest month of the year. Subaru sales rose 7 percent.

At the high end, BMW said its sales rose 3 percent in the month to a record as the company's SUVs remained popular.

August Cole is spot news editor at CBS.MarketWatch.com in San Francisco.