U.S. Auto Sales May Stall in August – Hurricane Irene and low confidence image

Car sales likely slowed in August because of fewer discounts, worries about the economy and Hurricane Irene, which shut East Coast dealerships during the final weekend of the month.

Irene closed out a disappointing summer for automakers, which report U.S. sales today. The storm followed bad economic news that discouraged some buying and shortages of cars caused by Japan’s earthquake.

The weight of low consumer confidence, the stock market and low inventories of Toyota Motor Corp (7203.T) and Honda Motor Co (7267.T) vehicles are the key reasons auto analysts expect U.S. new vehicle sales to fall in August from July or be flat at best.

Before the storm, J.D. Power was forecasting total sales of 1.07 million for the month. While that’s 4 percent higher than August last year, it’s still at a much slower pace than at the start of 2011.

Toyota Motor Corp. (7203), Asia’s largest automaker, may report an 11 percent decline in deliveries, the average estimate of four analysts surveyed by Bloomberg. That would be the fourth consecutive monthly decline of 10 percent or more following March’s tsunami and earthquake that disrupted production.

For now, the industry hopes that a return to more normal markets this fall will mean more buyers.

“September will be the acid test of underlying demand for the rest of the year,” Jeffries auto analyst Peter Nesvold said Tuesday in a note to investors.