'Clunkers' boosts US Aug sales; investors look beyond

U.S. government incentives likely pushed U.S. auto sales to a 20-month high in August, leaving analysts and the industry guessing how hard a landing to expect with the "Cash for Clunkers" program now exhausted.

Automakers could see the U.S. seasonally adjusted rate of sales, a closely watched indicator of demand for big-ticket items, jump to nearly 16 million vehicles in August under the "clunkers" program, analysts said. That would be the highest monthly sales rate since December 2007.

But with the incentive program ended and only heavily picked over vehicles left in inventories, September is expected to be a much leaner sales month, with the severity of the pullback dependent on the U.S. economy's health.

The annualized sales rate reached 15.8 million vehicles in August under the program, but likely will drop off the rest of the year, although not back to the lows seen early in 2009, Barclays Capital analyst Brian Johnson said in a note.

"We expect sales for the remainder of the year to fall well below August results, but believe momentum from the program as well as the stabilization in the economy and improvement in consumer confidence could boost sales above the 9.5 million average seen in the first half," Johnson said.

Johnson said the seasonally adjusted annual rate could be in the 10 million unit range in September and 10.5 million vehicles for the fourth quarter.

Among U.S. carmakers, Barclays expects Ford Motor Co sales to be up 53 percent in August from a year earlier. General Motors [GM.UL] sales, which were strong in August 2008 due to an incentive program, are expected to be down 9 percent and Chrysler Group LLC sales up 2 percent, it said.

For Japanese automakers, Toyota Motor Corp sales are expected to be up 22 percent, Honda Motor Co Ltd sales up 20 percent and Nissan Motor Co Ltd sales up 5 percent, Barclays said.

The top 10 "clunkers" program vehicle sales were dominated by Toyota and Honda, which had three vehicles each on the list, and by Ford with two vehicles.

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