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Glimmer of light as US goes clunkers

Sales leader: American Ford Focus sales jumped more than 50 per cent last month as cash incentives drove US car sales back into positive territory.

Incentives bring American car market back from the brink – for the moment, at least

General News logo4 Sep 2009

By RON HAMMERTON

THE blighted United States motor market eked out its first year-on-year sales gain in almost two years in August, up one per cent on the back of the US government’s cash-for-clunkers incentive scheme that finished last month.

Car buyers rushed in to beat the deadline, driving sales to 1.26 million cars in August – up just 2000 units on the same month last year, but, crucially, reversing the 27-year lows experienced for most of this year.

Big players Ford, Honda and Toyota all made sales volume gains over August 2008, but near-death companies General Motors and Chrysler still lagged, down 20 per cent and 15 per cent respectively as they struggled to regain the confidence of the buying public after their Chapter 11 bankruptcy experiences.

The plight of GM and Chrysler was in stark contrast with the fortunes of Korean corporate twins, Hyundai and Kia, which both rocketed up the charts.

Led by Hyundai’s record 60,467 units – a whopping 47 per cent jump over August 2008 – the Korean pair sold a combined 100,665 units, capped by record monthly sales for Hyundai’s Elantra and Genesis.

In doing so, the Korean conglomerate outsold Chrysler (93,222 units), marking the first time in history a Korean company has edged out one of the original ‘Big Three’.

80 center imageLeft: Hyundai Elantra and Subaru Legacy (Liberty).

So far this year, Hyundai and Kia are among only a handful of major car suppliers in positive territory on sales, with most still way behind by double-digit percentages.

Another that is enjoying a lift is Subaru, which is up 11.2 per cent year to date. In August, Subaru enjoyed a 51 per cent sales jump over 2008, spurred on by the arrival of its new Legacy (Liberty) and Outback range.

Fellow Japanese company Mazda also gained, up 12 per cent.

Ford remains the best performed of the American-owned companies, scoring its second-successive year-on-year monthly sales gain in August, up a handy 17.2 per cent after a 2.4 per cent lift in July.

Like Hyundai and Toyota, the Blue Oval was one of the big beneficiaries of the now-defunct cash-for-clunkers scheme that offered car buyers rebates of up to $4500 when they traded in their old cars on more fuel-efficient vehicles.

Its fuel-efficient Focus and Fusion were among seven Ford models to soar to August record volumes, with Focus up 56 per cent alone.

Ford’s stability in the market place has also helped the company to increase its market-share in 10 of the past 11 months.

However, Ford is still ranked third in the US market year to date, behind market leaders GM and Toyota.

Despite taking a 35 per cent bath in sales this year, selling just 1.4 million units compared with 2.1 million in the first eight months of 2008, GM is holding on to top rung ahead of Toyota on 1.17 million (down 29 per cent YTD).

Ford is nipping at Toyota’s heels on 1.1 million, although Toyota came back with a vengeance in August performance to sell 225,088 units for the month – up 6.4 per cent.

According to Automotive News, Toyota was the top-selling brand in the $US3 billion ($A3.56 billion) cash-for-clunkers scheme, which drew almost 700,000 car sale applications from dealers by the August 25 deadline.

Honda also made hay while the clunkers sun shone, turning in its best-ever August with a 9.9 per cent rise, to 161,439 units. Its entry-level Fit (Jazz) and CR-V experienced their biggest sales months, while Civic had its best August.

However, the big question for the US market is: What now? Analysts in the US are divided on whether sales will plummet due to the pull-forward affects of the clunkers scheme or hold on, thanks to improving economic conditions.

Year to date, the overall market remains depressed to the tune of 28 per cent.

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