• by Karl Greenberg , September 2, 2008

August might have been bad for auto sales, but it could have been worse without the incentives that automakers are lavishing on vehicles to keep consumers shopping. Will August turn out to be as bad as the other seven previous months?

Yes and no, says Edmunds.com, in its monthly review of the carnage. The L.A. firm sees overall sales of 1.26 million vehicles in the U.S. for August--a 14.4% decrease versus August 2007, but an improvement of 11.4% versus July.

Edmunds says Chrysler will hurt the most--with sales off 34%, followed by a 27.5% drop for GM, a 16.3% drop for Ford, and minus 7.2% for Toyota. Edmunds predicts that among the big five, only Nissan and Honda will see positive numbers--with sales up 2.3% and 0.9%, respectively.

Jesse Toprak, executive director of industry analysis for Edmunds.com, said that GM's results would have been off by 30% if it had not launched its latest Employee Discount for Everyone campaign. "But overall, the program has not been nearly as effective as its first implementation back in 2005."

Nissan's results may have to do with the fact that large vehicles like the Armada SUV and Titan never sold particularly well, so there was only so much damage that high gas prices could do to Nissan volume. But also, Nissan is applying more incentives than other Asian automakers. Per an Edmunds.com spokesperson, the company offered an average of $2,329 average per vehicle in July, versus $1,285 for Toyota and $1,116 for Honda.

Edmunds is predicting that in August, Nissan will have spent $2,312 for incentives; Honda will have spent $1,200; and Toyota will have spent $1,398.

"But Big Three incentive spending is down a bit, and GM's Employee Discount (ending today) is going to save them money because their incentives were so high to begin with, and with Employee Discounts, dealers are contributing," says the spokesperson, who says Edmunds predicts that GM's incentive spend for August will be $3,865 versus $4,063 per vehicle for July.

The firm says the Big Three monthly U.S. market share will end up at 45.1%--down from 52.1% in August last year, but an uptick from July. Specifically, predicts Edmunds, Chrysler's August market share will settle at 8.8%; Ford's at 14.1%, and GM's will be 22.2%. The firm predicts that Honda will have August market share of 12.7%; Nissan will have 7.8% and Toyota will have 17.2% share in August 2008--up from 15.9% in August 2007, but down from 17.4% in July 2008.