US car sales better than expected

General Motors, Chrysler, Ford and Nissan reported surprisingly strong US sales in August, as car buyers shrugged off bad economic news and a major East Coast hurricane.

Chrysler led the way today with a 31% increase from a year earlier, while GM’s sales rose 18%, Nissan was up 19% and Ford reported an 11% increase.

Industry analysts had expected a weaker August because of consumers’ anxiety about the economy and Hurricane Irene, which forced many dealers to close during the key final weekend of the month.

But Don Johnson, GM’s US sales chief, said other factors are making cars more attractive to buyers, including new products, low interest rates and stronger household budgets.

“Consumers are being cautious, yes, and appropriately so, but they are not retrenching,” he said. “All indications to us are that the industry is going to continue to slowly grow through the rest of the year.”

Chrysler reported its strongest August since 2007 with sales led by Jeeps and minivans, while Ford said sales of its redesigned Explorer SUV quadrupled over last year. Nissan reported strong sales of sub-compact and mid-sized cars such as the new four-door Versa and Altima sedan.

GM’s big increase was sparked by the Chevrolet Cruze compact, which accounted for one in every 10 GM vehicles sold. The Cruze, introduced last year, has been a top seller since the start of the year, giving the company its first strong product in a growing market. Cruze sales topped 20,000 for the fifth month in a row. Buyers also went for the Chevrolet Equinox and GMC Terrain small crossovers.

The sales figures today ran counter to expectations of a weak, 4% rise in nationwide sales for the industry. Still, Honda and Toyota are expected to report slower sales.

Vehicle sales had been a bright spot for the US economy until May, but began sputtering in the summer as consumer confidence waned and a March earthquake in Japan caused shortages of Honda and Toyota models. Then came the hurricane, which forced many East Coast dealers to close in the month’s final weekend. Normally buyers come out on the last weekend, lured by deals and advertising.

Sales could improve this autumn when manufacturers offer sweeter deals and a wider selection of models.

Cash-back offers, low-interest loans and other deals have been scarce this summer because of the model shortages. But they are expected to return as Honda and Toyota replenish their dealer lots in September and October and try to win back market share lost during the earthquake shortfalls.

Toyota will also begin selling its new Camry sedan in October, which could lift sales.

The industry remains cautious. The US unemployment rate is stuck at 9%, food and clothing costs are going up and consumer confidence dropped to its lowest level in more than two years in August.

To boost next month’s sales and help people whose cars were damaged by the hurricane, GM is offering to defer payments for 90 days.

Other carmakers reporting today included Volkswagen, with sales up 10% because of the Jetta sedan, which saw a 36% increase.