Well, Duh: U.S. Auto Sales Fell in August. Why? No Cash for Clunkers

(MoneyWatch)  Recent headlines have trumpeted the news that August was a bad month for U.S. auto sales. Don't take them too seriously.

It was predictable, and within reason maybe even desirable, that auto sales would fall short when compared to August 2009. After all, the car market was on steroids last year in the form of the U.S. government Cash for Clunkers program.

The drop in sales is even desirable in a way, because a big increase over last year's results would have required big-time discounts that the car companies can ill afford -- much larger than the current level. Chrysler, Ford (F) and GM are all trying to wean themselves off of price-cutting.

Cash for Clunkers cast a long shadow over this year's results, exaggerating the drop-off in sales. According to AutoData, U.S. sales fell 21 percent in August to just under 1 million. Cash for Clunkers last year paid a bonus for customers to trade in a gas-guzzler for a more fuel-efficient vehicle

The good news is that AutoData also estimated the Seasonally Adjusted Annual Rate at 11.5 million. That's an estimate based on sales history of how many the industry would sell in 12 months at the current rate. The August SAAR was right in line with the rest of 2010. In August 2009, the SAAR shot up to 14.2 million, the highest of the year by far. Before Cash for Clunkers kicked in, in July 2009, the SAAR never made it above 10 million in the first half of 2009.

U.S. auto sales for August 2010 continue a growth trend that's slow and steady, but hopefully sustainable. For instance, August sales for the four surviving brands at General Motors fell 11 percent from a strong year-ago month. That sounds pretty bad, but year to date, sales for the four GM "core" brands were up about 23 percent, to almost 1.5 million, the company said. Buick has been a high point this year. GM said sales of the Buick LaCrosse model were up more than 200 percent for the month versus August 2009.

In its bankruptcy reorganization last year, GM kept Buick, Cadillac, Chevrolet and GMC, the so-called core brands. It dropped Hummer, Saturn and Pontiac, and sold Saab. Including the discontinued brands, GM sales fell about 25 percent in August versus August 2009.

Ford (F) sales for the Ford, Lincoln and Mercury brands were down the same 11 percent, Ford said. Year to date, Ford sales were up about 18 percent to about 1.3 million. Ford said its market share increased in August 2010, for the 22^nd time in 23 months.

Ford didn't go bankrupt last year like GM or Chrysler, but Ford is dropping the Mercury brand after this year. Ford also sold Volvo recently. Earlier, Ford sold off Aston Martin, Jaguar and Land Rover.

All in all, it was inevitable sales would fall short in August 2010. It would have been a troubling sign if August auto sales had somehow managed to top the year-ago month.

Related:

• On a Roll: Ford, GM, Chrysler Gaining U.S. Market Share
• August Auto Sales Crash After Cash for Clunkers
• U.S. Auto Sales Dive in August

Photo: GM