Analysts estimate sales for August will be 18 percent below the annual rate of 14.2 million a year earlier, when the government 'Cash for Clunkers' incentives were in effect. Lingering high unemployment is blamed for consumers' wariness to make big-ticket purchases such as vehicles.
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SOUTHFIELD, Mich. - Auto sales in August probably were the slowest for the month in 28 years as model-year closeout deals failed to entice buyers.
Industrywide deliveries, to be released Wednesday, may have reached an annualized rate of 11.6 million vehicles last month, the average of eight analysts' estimates compiled by Bloomberg. That would be the slowest since 1982, according to researcher Ward's AutoInfoBank.
The rate would be 18 percent below last year's annual rate of 14.2 million, when the government was offering "Cash for Clunkers."
"People just don't want to make big-ticket purchases because they're uncertain about their jobs and the value of their homes," said Jesse Toprak, vice president of industry trends at TrueCar.com.
Although automakers increased discounts by 1 percent from July to an average of $2,864 a vehicle, sales to individuals probably fell 7 percent from last month, Santa Monica, Calif.-based TrueCar estimated.
Mike Wall, an analyst for IHS Automotive in Grand Rapids, Mich., said consumers are avoiding showrooms as fear of a double-dip recession grows after the 27 percent plunge in existing-home sales in July. The unemployment rate in July held at 9.5 percent, near a 26-year high of 10.1 percent.
"When you've got that sentiment, that fear hanging over the market, it makes it a tough sell for consumers" to spend $25,000 or more on a vehicle, said Mr. Wall.
Ford Motor Co. is to announce its fourth-quarter production schedule Wednesday, said George Pipas, the automaker's sales analyst. Joseph Amaturo, an auto analyst for Buckingham Research Group, wrote in a recent research note that Ford will build 575,000 cars and trucks in the final three months of the year, up slightly from 574,000 a year earlier. Ford may also boost third-quarter production, now scheduled for 570,000 vehicles, he said.
Ford may have posted a smaller sales decline from last August than the overall industry, and Chrysler Group LLC may have increased deliveries. Ford will post a 5.2 percent sales drop, the average of six analysts' estimates. Chrysler, aided by deliveries to large buyers such as rental-car companies, will have an increase of 3 percent, the average of six estimates.
General Motors Co. will fall 19 percent, the average of four estimates, in line with the industrywide drop.