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Clunkers deals push auto sales

But some say August’s pace can’t be sustained

Chris Wasmer worked on an engine for a 2010 Ford Escape at Ford’s assembly plant in Claycomo, Mo. The Escape was one of the top-selling cars in the cash for clunkers program. Chris Wasmer worked on an engine for a 2010 Ford Escape at Ford’s assembly plant in Claycomo, Mo. The Escape was one of the top-selling cars in the cash for clunkers program. (Charlie Riedel/Associated Press)
By Kimberly S. Johnson and Dan Strumpf
Associated Press / September 2, 2009

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DETROIT - The nation’s automakers are bracing for quieter showrooms and slower sales this autumn after the cash for clunkers program offered a big but unsustainable boost in August.

US sales of cars and light trucks rose to 1.3 million in August, a 30 percent increase from July. It also was the first year-over-year gain since October 2007.

Ford, Toyota, Hyundai, and Honda were the big winners as consumers snapped up their fuel-efficient cars. Rivals Chrysler Group LLC and General Motors Co. endured another month of falling sales, although their high-mileage vehicles did better.

But the August industry gains could quickly be followed by a slowdown in September and for the rest of the fall, automakers and analysts warned yesterday. Although the clunkers program succeeded in bringing in new buyers, a large portion were people who planned to buy vehicles later in the year.

The hefty rebates gave automakers and dealers a much-needed lift, spurring 690,114 new sales, many of them during August, at a taxpayer cost of $2.88 billion.

Several automakers said their supplies plummeted in August, especially for their fuel-efficient models.

That could make it harder for customers to find the exact model they want going forward.

Still, the coming months might offer some stability in an auto sales market that’s been floundering for more than a year. Even before the program began in late July, sales were showing small signs of improvement.

“We believe the fourth quarter will be better than the second quarter,’’ said Ken Czubay, Ford’s vice president of US marketing and sales.

August sales at Ford Motor Co. totaled 181,826 cars and light trucks, up 17 percent from a year earlier.

Two of Ford’s vehicles - the Focus and Escape - ranked among the top-selling cars under the clunkers program.

In another sign of a strengthening economy, sales rose for Ford’s pickup trucks, which are popular among contractors, and other small businesses.

Japanese automakers Toyota Motor Corp. and Honda Motor Co. also posted gains year-over-year in August. Toyota sales rose 6.4 percent to 225,088, lifted by small cars like the Corolla, the best-selling clunkers vehicle.

At GM, sales fell 20 percent to 245,550. GM said its inventory levels hit a record low of 379,000 during August, but like Ford will be replenished this month thanks to production increases.

Chrysler sales fell 15 percent to 93,222 units.

That was less than the combined sales of Hyundai Motor America and affiliate Kia Motors America, whose smaller sedans helped boost sales to a combined 100,665 for August.

Top 'clunker' sales

Top 'clunker' sales

The 10 most popular cars bought under the 'clunkers' program.