US auto sales hit pre-recession high

Double-digit auto sales gains in the U.S. by American and Japanese manufacturers made August the best month the industry has seen in six years, signaling an uptick in sales in a sector significantly hampered by the recession.

Sales in August ran at an annual rate of 16.1 million cars and trucks, a pace not seen since November 2007, a month before what is generally regarded as the start of the Great Recession.

Honda reported the biggest gain, with sales up almost 27 percent over August of last year. Toyota sales rose nearly 23 percent, while Nissan was up 22 percent. At General Motors, sales were up almost 15 percent, for the company's best month since September 2008. Chrysler and Ford each reported 12 percent gains.

Ford sold more than 70,000 F-series pickup trucks, the nation's best-selling truck, in August. 

Of major automakers, only Volkswagen experienced a decline, down nearly 2 percent after posting huge gains last year.

Meanwhile, auto stocks rose, with Ford and GM up around 4 percent. U.S.-traded shares of the Japanese automakers all rose more than 1 percent.

Mustafa Mohatarem, GM's chief economist, predicted that rate of sales is here to stay. History, he said, showed that auto sales follow a trend, and that trend is once again above pre-recession levels.

"With the underlying economy fairly solid and with the still very high average age of the fleet, I have full expectations that we will continue to see a fairly steady industry," Mohatarem said.

The average age of a vehicle on U.S. roads today is a record 11.4 years old, according to the Polk research firm. That means more people have to replace cars and trucks that they kept through the recession.

While GM didn't officially raise its sales forecast for the year from 15.5 million, Mohatarem said he expects the year to end with sales closer to 15.8 million vehicles.

And the industry is on better footing than it was in 2007. Prices are high, and automakers aren't resorting to huge discounts to pull customers into showrooms, Mohatarem said.

The average U.S. vehicle sold for an estimated $31,252 last month, up almost $1,000 over August of last year and $24 higher than the previous record, in December 2012. Five automakers -- Chrysler, Ford, Honda, Nissan and Volkswagen -- all had record-high selling prices last month, according to TrueCar.com, an auto-pricing website.

High trade-in values are allowing automakers to offer attractive low-cost lease deals. And low interest rates are giving buyers room to add options and still keep monthly payments relatively low. The industry tracking firm Experian said earlier this week that nearly 28 percent of people who financed cars in the second quarter leased them, a record high.

LMC Automotive, an industry consulting firm, is predicting that total U.S. sales last month were close to 1.5 million, about 12 percent higher than a year ago. That's the highest number since May 2007.

The Associated Press