American Auto Sales Slow Down

US Auto Sales during August registered the slowest pace for the month in 28 years

Automobile sales in the United States during August registered the slowest pace for the month in 28 years as discount sales failed to attract customers anxious about the gloomy economic forecast and looming job losses.

An annualized rate of 11.6 million vehicles this August would be the slowest August since 1982, according to Auto Info Bank. That would be 18 percent below the 14.2 million pace last year, when the government's “cash for clunkers”  program boosted car sales.

“Home sales are way down, the stock market is way down, the unemployment report is very disappointing and consumer confidence is sputtering,” says Jesse Toprak, vice president of industry trends at TrueCar.com.

“People just don't want to make big-ticket purchases because they're uncertain about their jobs and the value of their homes,” Toprak added.

TrueCare estimates that sales to individuals dropped 7 percent from last month despite bigger discounts offered by automakers. The discounts were increased by 1 percent from July to an average of $2,864 per vehicle.

“People are not going to showrooms because of fears that a double-dip recession may happen following the announcement that existing home sales in July plummeted 27 percent,” said Mike Wall, an analyst for IHS Automotive, based in Michigan. The July unemployment rate registered at 9.5 percent, approaching 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 Wall.

Posted by James Fried on Tuesday August 31 2010, 10:57 AM EST. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0