DETROIT (AP) — As China's auto market recoils, the U.S. remains a bright spot as it rolls on toward its best performance in more than a decade.
China is still the No. 1 market, but sales there are slowing as the economy cools and cities impose car ownership limits to curb smog and congestion. It's a reversal from six years ago, when U.S. vehicle sales plunged during the recession and China easily surpassed the U.S. as the world's largest car market. At least temporarily, automakers are left to rely on the U.S. — and a recovering Western Europe auto market — for sales growth.
Sales figures for August released Tuesday by Sweden's Volvo Cars tell the story: Volvo's U.S. vehicle sales jumped 18.3 percent as the new XC90 SUV went on sale, and they rose 6.5 percent in Europe. But its sales in China plunged 10 percent. One of every five vehicles Volvo sells globally is sold in China.
All major automakers released U.S. sales figures Tuesday, and reports were mixed. Analysts expect sales of new cars and trucks to decline slightly from last August, but primarily because sales for a late-arriving Labor Day weekend will be included in September figures. Labor Day is typically a big sales weekend as dealers hold model year-end clearance sales. Last year the holiday was counted as part of August sales.
Global figures for August will be released later this month.
U.S. sales remain on pace to top 17 million this year for the first time since 2001. Low interest rates, low gas prices, high consumer confidence and enticing new small SUVs like the Jeep Renegade and Honda HR-V are drawing buyers to dealerships despite some angst in the stock market caused by fears of the economic slowdown in China.
For August, Ford reported a 5-percent gain as sales of its new F-150 gained steam, and Fiat Chrysler's sales rose 2 percent thanks to strong demand for Jeep SUVs. General Motors said its U.S. sales were flat last month, as it saw strong demand for the Chevrolet Silverado but Cadillac sales declined.
Toyota's U.S. sales fell 9 percent and Honda's sales fell 7 percent, hurt by their car-heavy lineups in a market where buyers want SUVs. Volkswagen's sales dropped 8 percent. Nissan's sales were flat.
In Western Europe, car sales have risen for 22 months in a row, coming off a trough caused by the global recession and the debt and financial crisis in the countries that use the euro currency. Sales were up 7 percent through July, according to LMC Automotive.
Lower European oil prices have put more money in consumer's pockets, and governments have eased austerity cutbacks aimed at reducing debt. But sales in Eastern Europe tumbled 11 percent because of the deteriorating economy in Russia.
Now there is concern about China, where new vehicle sales fell by unexpectedly wide margins of 3.3 percent in June and 6.6 percent in July. August sales figures should reflect Chinese consumers' reaction to a further 12.5 percent drop in the Shanghai Composite Index.
Chinese sales growth peaked at 45 percent in 2009, the same year U.S. sales sank to a 30-year low of 10.4 million vehicles. But growth has steadily declined since then. Forecasters who had expected sales to grow 8 percent in China this year recently slashed that to as low as 1.7 percent.
Slumping sales are likely to force German automakers, which are unusually dependent on sales to China, to issue profit warnings, said Bernstein analyst Max Warburton in an Aug. 27 report.
If the sales slowdown in China continues, U.S. buyers could eventually see more vehicles imported from China, as automakers try to maximize production at the plants they have built there. Automakers could also shift vehicles planned for China to the U.S., but that could be a challenge because vehicles popular there — like big sedans — aren't necessarily popular here.
"We're in a wait and see mode for China right now," said Akshay Anand, a market analyst with Kelley Blue Book.