U.S. government incentives likely pushed U.S. auto sales to a 20-month high in August, leaving analysts and the industry guessing how hard a landing to expect with the Cash for Clunkers program now exhausted.

Automakers could see the U.S. seasonally adjusted rate of sales, a closely watched indicator of demand for big-ticket items, jump to nearly 16 million vehicles in August under the clunkers program, analysts said. That would be the highest monthly sales rate since December 2007.

But with the incentive program ended and only heavily picked over vehicles left in inventories, September is expected to be a much leaner sales month, with the severity of the pullback dependent on the U.S. economy's health.

The annualized sales rate reached 15.8 million vehicles in August under the program, but likely will drop off the rest of the year, although not back to the lows seen early in 2009, Barclays Capital analyst Brian Johnson said in a note.

We expect sales for the remainder of the year to fall well below August results, but believe momentum from the program as well as the stabilization in the economy and improvement in consumer confidence could boost sales above the 9.5 million average seen in the first half, Johnson said.

Johnson said the seasonally adjusted annual rate could be in the 10 million unit range in September and 10.5 million vehicles for the fourth quarter.

Among U.S. carmakers, Barclays expects Ford Motor Co sales to be up 53 percent in August from a year earlier. General Motors sales, which were strong in August 2008 due to an incentive program, are expected to be down 9 percent and Chrysler Group LLC sales up 2 percent, it said.

For Japanese automakers, Toyota Motor Corp <7203.T> sales are expected to be up 22 percent, Honda Motor Co Ltd <7267.T> sales up 20 percent and Nissan Motor Co Ltd <7201.T> sales up 5 percent, Barclays said.

The top 10 clunkers program vehicle sales were dominated by Toyota and Honda, which had three vehicles each on the list, and by Ford with two vehicles.

'CLUNKERS' SUPPORT

Dealers submitted 690,114 new vehicle transactions under the clunkers program that started in late July and ran out three weeks into August at a cost of about $2.88 billion.

How many of clunkers deals landed in August is not completely clear, though U.S. Department of Transportation data suggests roughly 450,000 sales in August and 240,000 in July.

Also unclear is how many of those August deals would have been completed without the incentives, and whether they were pulled forward from the near future.

Our only concern is how much of that will truly be incremental volumes as opposed to just borrowing from the future, Rebecca Lindland, director of automotive research at IHS Global Insight, said in an interview.

IHS Global Insight estimated that about 250,000 vehicles were sales that would not otherwise have been made, though that figure could be higher, Lindland said.

Lindland said the annualized rate of sales could be 14.5 million to 15 million units for August, with September falling back to the 9.5 million unit range. A significant hit on sales also is expected in the fourth quarter, she said.

While we are seeing signs of it getting better, the economy is still not in great shape, Lindland said. It is getting better as opposed to getting worse but we're still not driving in the fast lane.

On a percentage basis, automakers still may report that industry sales fell in August from a year earlier. The August selling period wraps up on Monday and has 26 selling days, one fewer than in August 2008.

JP Morgan analyst Himanshu Patel said the seasonally adjusted rate could hit 15.3 million vehicles in August, followed by a hangover to perhaps a 9 million unit monthly selling rate from September to the end of the year.

While the fast-money crowd may over-react to this likely SAAR decline, it is worth stepping back and remembering that in the nine months pre-clunkers, U.S. retail SAAR showed strong signs of sequential stabilization, all but confirming that a bottom had been found, Patel said in a note.

Edmunds expects a seasonally adjusted annual rate of just over 13 million units, with sales tapering quickly toward the end of August after the clunkers program ended.

Ending August on such a low note does not bode well for September, Edmunds.com Senior Analyst Jessica Caldwell said.

(Reporting by David Bailey, Soyoung Kim and John Crawley, editing by Leslie Gevirtz.)

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