posted 09-05-2003 03:58 PM         

September 03, 2003

Automakers on Wednesday said their U.S. sales heated up in August, as strong rebates and an improving economy pushed sales to their strongest monthly pace this year.

But the news was mixed for Detroit, as Toyota Motor Corp. outsold the Chrysler group for the first time in the United States, and Ford Motor Co. reported a 14.9 percent drop in sales.

General Motors increased its third-quarter production, but sales were still down 4.2 percent compared with last August's strong results.

In contrast with GM, Ford cut its third-quarter car production, blaming the August power outages. George Pipas, Ford's director of sales analysis, suggested Ford was more restrained with incentives than GM or Chrysler.

Many analysts expect the Big 3 to lose market share to foreign automakers, especially Japanese makers, despite incentives on domestic brands averaging roughly $4,000 per vehicle.

Toyota Motor Corp. said sales of its Toyota and Lexus brands were up 7.4 percent, with more than 200,000 sales in the month for the first time. Through August, Toyota is the most popular brand of passenger car in the United States, outselling Ford and GM's Chevrolet.

Toyota's results pushed it past Chrysler in monthly sales for the first time. Chrysler reported a 6 percent decline in sales; while its pickups sold well, its passenger car sales slumped.

Nissan said it sales were up 10.1 percent in August, thanks to strong sales of its Altima sedan and new Quest minivan, as well as a 59 percent boost at its luxury Infiniti unit.

Smaller foreign automakers also reported sales gains. Hyundai Motor Co. Ltd. saw its sales rise 3.2 percent on an increase in small SUVs, while the Subaru unit of Fuji Heavy Industries Ltd. reported an 7.2 percent increase.

There's little sign that automakers expect natural demand to pick up soon, as they continue to pitch rebates, cheap loans and other incentives at buyers. While some executives have suggested deals would decline with the 2004 model-year vehicles going on sale now, Chrysler and GM have already unveiled rebates of up to $3,000 on new models