Ford Down, Toyota and GM doing fine.

Actually despite significant incentives, particularly on the new Tundra, Toyota division sales were down significantly as well. GM was doing fine for a change. The brightest spot for the Toyota division was the Prius (again). The Lexus division was also up for the month, so that for Toyota USA as a whole, sales were only down about 3% (but still up by around 5% for the year to date). From Automotive News:

"Toyota said August sales totaled 233,471 vehicles, down from 240,178 units a year earlier. Toyota Division cars led the decline with an 8 percent dip from August 2006. Sales of the Yaris small car plunged 31 percent, fueled by an unexpected demand for the three-door hatchback and a shortage of all models.

"Corolla and Avalon car sales both fell about 12 percent, with Corolla selling 30,491 units and Avalon 5,880.

"The Camry sedan led Toyota Division's August sales with 42,658, while sales of the Prius hybrid grew 25.7 percent to 15,055 cars. It was an August record for the Prius."

So I don't think Fords decline was so bad given that the Toyota division was down 8%. Ford's flagship product, the F150, is now the oldest full size pick-up design. I would expect that when it is replaced with a new model there will be a surge in sales. GMs resurgence was interesting. I can't think of a single GM product I am interested in at the moment, except the Corvette. Clearly my tastes do not match those of the general American population.

Ed

Think that car sales being down may also have something to do with the real estate industry?

Actually, they might have something to do with the real estate industry. The credit meltdown is going to affect a lot of things. People DO buy cars with home equity. It's probably a stupid thing to do but that doesn't always stop them.

However, with a drop in housing starts, one would expect truck sales to decline but it looks like truck sales were UP (although I only looked at Ford, GM and Toyota). Down slightly at Ford but up enough at GM and Toyota to offset that and more. Not only that, but GM's small pickups were down, so I'd guess, overall, it was the larger vehicles that were up. At Toyota, it was certainly the case that the big pickup was up (18%).

With gas at $3/gallon, how crazy is that?

Well that is what the press is saying. I don't agree, at least not if you are saying trouble in the real estate industry is directly causing the decline in car sales. I think both industries are down for the same reasons. People have lost confidence. If real estate sales were not in decline, there would not be a problem with sub-prime loans. However, once sales leveled off, those shaky loans looked really bad. As long as the market was hot and prices were increasing, people who could not afford the loans could just sell off the house (probably at a profit) and everyone was happy. With sales and prices in decline, people with bad loans are stuck. The house is worth less, they can't make the payment, so they walk away. The lenders are stuck with houses they can't sell for enough to cover the loan. However, if you are a savvy investor this is probably a good time to buy....

As for car sales, I think that maybe, just maybe, people are starting to realize that we don't have to have an almost new car for every man, woman, and child in America. This year cars are selling at a rate of more than 15 million new cars and trucks per year. The average car lasts somewhere around 14 years. There are already more cars than licensed drivers in the US. At some point, maybe this year, the demand might just drop off because people have come to their senses.

Ed

Wrong. The problem with subprime loans is that the loans were bad loans that came back to bite the people who made them.

They were really bad before the sales leveled off.

Gee, you think? A lot of people in NYC don't own a car. And, car sales have been slowly slipping for years. Car last longer than before.

Last year the slipped from the year before. And I think the year before that. In fact, I think the peak was in 2002.

Jeff

MAybe not so crazy. Large pickups are capable of having "okie boxes" (camper shells or mini-motor homes) places in their beds, so maybe the folks who are contemplating losing their no-down-payment, teaser-rate homes are looking forward to the time they'll be living out of their truck. Just a thought.