US light vehicle sales fell by 1% in August over year ago levels. The decline was smaller than some analysts had predicted reflecting generally stepped up incentives activity in the face of concerns over underlying consumer confidence.

Ward's put the market at 1.47m units, 0.7% below the same month last year. Cumulative sales for the first eight months are put at a whisker under 11m units - 2.9% under the same period of last year.

It was a mixed month for Detroit. GM managed a 6% sales increase and a share increase on the back of heavy discounting on its full-size pick-ups and sales to the rental sector up 24% on last year.

But there were further declines for Ford (-14.4% on last year) and Chrysler (down 6.1%).

Among the top six manufacturers, Honda Motor Co and Nissan Motor Co Ltd posted sales gains that were accompanied by higher incentives.

There was another monthly sales drop for Toyota, which was 2.8% off last year's pace. Analysts said that Toyota's decline reflected lower incentives.

GM sales analyst Paul Ballew said the U.S. economy now appeared on track for growth of less than 2% this year and only modest improvement in 2008.

"For us, it certainly constitutes a challenging backdrop," Ballew told analysts.

Ford said its sales decline reflected a continuing strategy of throttling back on low-margin sales to rental firms. That category of Ford's sales fell 44% in the month.

The company is offering a USD$1,000 incentives campaign on many models through September. 

Ford also said industry results were being hurt by a weaker housing market and an increased wariness about big-ticket purchases, particularly in lower income households.

"The uncertainty surrounding the current situation is quite substantial," Ford economist Ellen Hughes-Cromwick said.