Eco-friendly cars, small SUVs drive August auto sales up 20 percent

Eco-friendly cars, small SUVs drive August auto sales up 20 percent

September 15th, 2012 JERRY HIRSCH, LOS ANGELES TIMES in Carscruisin

Auto sales surged in August as consumers reacted to higher gas prices by snapping up fuel-efficient cars and small sport utility vehicles.

Total auto sales for the month were just under 1.3 million, 19.9 percent higher than a year earlier. That would put the annual pace at 14.5 million vehicles, the best of any month since the federal "cash for clunkers" economic stimulus program in August 2009 and a rate 2 million vehicles ahead of August 2011's.

"The auto industry continued to outperform the general economy," said Bill Fay, Toyota group vice president and general manager. Easier credit and the need for people to replace aging vehicles they held onto during the Great Recession and subsequent anemic recovery contributed to the trend.

Fuel-efficient vehicles were especially good sellers as gas prices neared or crossed $4 a gallon in much of the nation. Sales of Toyota's Prius hybrid more than doubled to more than 21,000 vehicles.

Sales of Toyota's Prius more than doubled in August.

The gain was helped in part by greater availability of the vehicles as an inventory shortage created by last year's earthquake in Japan abated. The brisk sales made the Prius the ninth best-selling passenger car in America.

Sales of Toyota's Camry hybrid also soared. General Motors Co. said its Chevrolet passenger car sales jumped 25 percent, with gas-sippers such as the Spark, Sonic, Cruze and Volt plug-in hybrid all posting their bestever monthly sales. The Cruze, Sonic and Spark "were all unknown nameplates just a few years ago, but together they now almost equal the volume of Silverado," Chevrolet's bestselling truck and "the core" of the brand's identity, said Jessica Caldwell, an analyst with auto information company Edmunds.com.

The consumer shift to smaller cars and SUVs is coming at the expense of large sport utility vehicles. Sales of Chevrolet's Suburban and Tahoe both fell by a third or more. Sales of Ford's Expedition and Nissan North America's Armada both dropped 14 percent.

Consumers are comparing the cost of repairing and operating older vehicles with what they would have to pay for a new vehicle, and higher fuel prices have become a tipping point, said Ken Czubay, Ford's U.S. sales chief.

The average age of vehicles on the road now is approaching 11 years, and the fuel savings compared to a new car can be significant, he said. For example, a driver of a 2013 Ford Escape SUV with a small turbocharged, four-cylinder engine would save about $700 a year in gas compared with a 2002 version of the Escape, according to Environmental Protection Agency fuel economy data.

That grows to $1,250 a year for people downsizing from a 2002 Ford Explorer, a bigger SUV.

Likewise, Nissan's hot-selling 2013 Altima sedan will cost a driver about $600 less a year to fuel than the 2002 Altima. The comparisons assume the vehicles are driven 13,500 miles annually at an average gas price of $4 a gallon.

GM, the nation's largest auto seller, posted sales of 240,520, a 10-percent gain. Ford Motor Co. sales rose 13 percent to 196,749 vehicles. Chrysler Group sales climbed 14 percent to 148,472 vehicles. It was the automaker's best August sales since 2007. Chrysler's gain was driven in part by sales of its new Dodge Dart compact sedan. Ram truck sales also were strong.