August auto sales gloomy

Auto sales, once a bright spot in the economic recovery, grew fainter last month nationwide — though not for all Mid-Valley dealers.

The pain was widespread. Big car companies General Motors, Ford and Toyota all saw sales slip. Smaller automakers like Subaru suffered too, as did companies that appeal to the budget minded, such as Kia and Hyundai.

Buyers are nervous about the economy's health and stayed away from showrooms, a worrisome sign since August is typically a strong month. Total industry sales could fall below 1 million new vehicles once automakers finish reporting sales on Wednesday, making it the worst August in 27 years.

"There hasn't been enough horsepower behind the recovery to motivate consumers to regain their confidence and purchase vehicles at a higher rate," says Jeff Schuster, executive director of global forecasting for J.D. Power and Associates.

Falling sales were just at acute at dealerships such as John L. Sullivan Dodge Chrysler Jeep in Marysville. August sales came in 40 percent lower than for the same month in 2009, with the declines felt across most price ranges, according to general sales manager John Wood.

"I need to be as optimistic as I can," he said Wednesday. "I know the business is cyclical and it'll turn around; it's just a matter of when. I believe it will turn around — I can't pinpoint when."

Car buyers are also struggling to find bargains.

Most automakers are making money at lower sales levels because they've cut production. They no longer need to offer cars at below break-even prices just to move them off lots. The average discount per vehicle fell 3 percent in August to $2,681 per vehicle, according to auto research website Edmunds.com.

"We know it's going to be a modest recovery, it's going to be bumpy," said Don Johnson, GM's vice president of U.S. sales. "What we don't want to do is get back to putting incentives on the vehicles."

Ford is responding to weaker demand by slowing production in the fourth quarter. The Dearborn, Mich.-based company will make 570,000 cars and trucks, down from 574,000 in 2009.

Tight supplies have been one of the few crimps on Yuba City's main Ford retailer, which reported a boost in from last August's levels, according to Brett Geweke, manager of Larry Geweke Ford.

"A lot of it is in the financing," he said. "Unemployment is high in this area and I know a lot of banks take a look at that, because people are worried about their job stability."

While a steep decline in truck and sport-utility vehicle sales has been blamed for many of the U.S. automakers' woes, sales of pickups — for work and not personal use — and smaller car-based SUVs have stood up well in farming-dominated Yuba-Sutter, said Michael Wheeler, owner of Wheeler Chevrolet-Oldsmobile-Cadillac-Mazda in Yuba City. He reported sales down 10 percent in August from last summer's rebate-boosted level, but up 15 percent for the year versus 2009.

As for the slower pace of carmaking, Wheeler said a good reason can be found nearby — in the area's half-empty housing subdivisions.

Carmakers "don't want to be like homebuilders building too many homes and nobody to occupy them," he said. "They dont want to be caught in that game again."

GM's August sales fell 7 percent from July, and an even sharper 25 percent from August of 2009, when they were boosted by the government's Cash for Clunkers rebates. All four of GM's remaining brands saw sales drop from July. Pricier brands Cadillac and Buick lead the way, falling 15 percent. Chevrolet and GMC sales also fell.

Ford saw sales slip 5 percent from July, while Toyota's fell 12 percent.

Subaru sales slipped 7.2 percent. Kia Motors Corp. sales fell 8 percent and Hyundai Motor Co.'s were essentially flat.