Image: Fords
Wilfredo Lee  /  AP
Ford and other automakers got a big lift in July and August from clunkers, which spurred sales of nearly 700,000 new cars and trucks.
updated 10/1/2009 9:00:26 PM ET 2009-10-02T01:00:26

U.S. auto sales fell sharply in September, enduring a tough hangover from this summer's buying spree driven by big discounts to consumers.

U.S. sales of cars and light trucks fell to just under 746,000 in September, down 41 percent from August.

Both GM and Chrysler were the biggest losers last month, while Ford, the healthiest of the Detroit Three, reported the smallest drop of major automakers. Of the top companies, only Hyundai posted higher sales, up 27 percent from September 2008.

Last month's slump brings car and truck makers back to earth following a heady August. Automakers got a lift from clunkers, which spurred sales of nearly 700,000 new vehicles during the summer months. Big rebates lured in many buyers who otherwise would have waited until later in the year to walk into dealerships.

Still, both GM and Ford said the clunkers letdown should pass by next month. They also forecast a slight recovery in sales with signs of economic improvement.

October, however, is traditionally a slow month for sales. On top of that, shoppers are guarding their wallets, worried about keeping their jobs in a fragile economy. The question remains whether dealers can really lure them back and help the industry recover over the remainder of the year.

Higher incentives didn't shake buyers from their September slumber. Automakers spent an average of $2,557 per vehicle in the U.S., up $83 from August, according to the auto Web site

Video: Auto sales screech to halt

"After five straight months of decline, incentives are on the rise again," Edmunds analyst Jessica Caldwell said. "Now that Cash for Clunkers is over, automakers have to give consumers an incentive to buy — out of their own pockets, not the taxpayers'."

Ford Motor Co.'s sales fell 5.1 percent, but the decline followed two straight months of rising sales. Two of the Dearborn, Michigan company's vehicles — the Focus and Escape — were top sellers in the clunkers program.

General Motors Co.'s sales plunged 45 percent while Chrysler Group LLC's fell 42 percent. The weak results continued a string of monthly sales drops for the troubled pair. Now the question is whether their government-funded recovery plans are working.

Sales fell in every GM division. Saturn led the way with an astounding 84 percent decline in September, the same month GM announced plans to abolish the brand after its sale to former race-car driver Roger Penske collapsed.

"It was a more difficult month than we anticipated," said Mark LaNeve, GM's vice president of U.S. sales.

A spokeswoman for the U.S. Treasury Department, which has provided roughly $65 billion to keep GM and Chrysler going, would not comment on the sales figures.

Most automakers reported low inventories during September but said production increases were starting to replenish them.

GM's LaNeve said last month sales were compared with a strong September in 2008 when GM offered employee discounts to every customer in celebration of its 100th birthday. With easier comparisons, October will show better results.

He said the company could have had stronger September sales but it was struggling to keep up with demand for newly launched vehicles such as the Buick LaCrosse sedan, Chevrolet Camaro sports car, and the Chevrolet Equinox crossover vehicle. GM could have sold 10,000 to 12,000 more car and light trucks had it been able to get them to dealers in September.

Japan's Toyota Motor Corp. said sales fell 13 percent while Nissan Motor Co. said its sales eased 7 percent. Honda's sales dropped 20 percent.

Toyota blamed its sales drop on low stocks, and also said it was confident of a recovery through the rest of the year.

Automakers also reported that luxury car sales were starting to show life, another sign of recovery. Toyota's Lexus line saw a 12 percent sales increase in September, which the company attributed to several new model launches.

Last month's sales, if projected for an entire year, dropped to 9.2 million vehicles, far less than the clunker-fueled 14.1 million reported in August, according to Autodata Corp.

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