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August US auto sales flat amid economic turbulence

GM surprises with 6% sales gain as Ford, Toyota slump

Continuing concern over high gas prices took a toll on auto sales last month. The economic uncertainty that haunts the industry could give automakers a stronger argument in talks with the United Auto Workers. Continuing concern over high gas prices took a toll on auto sales last month. The economic uncertainty that haunts the industry could give automakers a stronger argument in talks with the United Auto Workers. (David Zalubowski/Associated Press)

DETROIT - After a dismal start to summer, August looked a little brighter for the auto industry despite continuing concern over high gas prices and turbulence in the housing and financial markets.

US sales were flat compared with last August, but that was better than the 12 percent decline the industry saw in July. The annualized sales rate for August was 16.3 million vehicles, the first time that number topped 16 million since May, according to Autodata Corp. The rate shows what sales would be if they continued at the same pace for the full year.

"It's a solid month against a subpar industry," Paul Ballew, General Motors Corp.'s top sales analyst, told investors and reporters in a conference call. Still, Ballew said the industry is being hit by economic uncertainty. High gasoline prices and declining home values have caused people to delay auto purchases or exit the market altogether, he said.

That uncertainty could give the companies a stronger argument in contract talks with the United Auto Workers to cut what domestic automakers say is about a $25-per-hour labor cost gap with its main Japanese competitors. Contracts between the UAW and Ford Motor Co., GM, and Chrysler LLC expire on Sept. 14.

The domestic automakers, who saw their US market share dip below 50 percent for the first time in history in July, clawed their way back up to 51 percent of the market in August, according to Autodata.

GM, the world's biggest automaker, surprised analysts by posting a 6 percent increase in sales, led by a 16.6 percent increase in truck sales. Part of that was due to a 24 percent increase in sales to rental car companies, which GM and other US automakers have been trying to cut back on because they hurt brand image and resale values.

Toyota Motor Corp. beat out Ford Motor Co. in sales for the month and overtook Ford for the first eight months of the year. Ford posted a 14.4 percent decline for the month. Ford sales analyst George Pipas said that was partly due to a 44 percent decrease in sales to rental car fleets.

Chrysler's sales were down 6.1 percent in August, the same month the company finalized its breakup with DaimlerChrysler AG and transferred into private ownership. Toyota's sales were down 2.8 percent. A spokesman said ongoing volatility in the housing and credit markets is challenging consumer confidence, particularly in Toyota's stronghold of California.

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