NEW YORK (CNNMoney.com) -- Falling gasoline prices were not enough to revive sales of SUVs and pickups in August as major automakers all reported a sharp fall in sales once again. And Ford Motor warned it sees even tougher times ahead.

General Motors (GM, Fortune 500), the nation's largest automaker, reported that sales tumbled 20% from year-ago levels. That wasn't as bad as expected though -- sales tracker Edmunds.com was forecasting a 28% drop.

In fact, August turned out to be GM's best month this year. The company sold 307,285 vehicles thanks to a popular "employee pricing" incentive program which allowed any buyer to get a vehicle for the same cost as a GM employee. That offer, in place for the last third of the month, has been extended into September.

But there was plenty of weakness in the report as sales of light trucks, which includes pickups, SUVs and vans, tumbled 24% from a year ago.

Nonetheless, GM said it is starting to see some signs of improving demand for SUVs and other large vehicles.

"With the recent moderation in fuel prices, we're seeing some relaxation of pent-up demand in pickups and utilities," said Mark LeNeve, the GM vice president in charge of sales and marketing in North America.

But Ford (F, Fortune 500), the No. 3 automaker, warned of weak demand through the rest of this year.

"We expect the second half of 2008 will be more challenging than the first half, as weak economic conditions and the consumer credit crunch continues," said Jim Farley, group vice president of marketing and communications, in the sales report.

Ford reported U.S. auto sales fell 27% in the month compared to a year earlier -- far worse than the forecast of a 16% drop from Edmunds.

Toyota's sales fell 9% in August. Edmunds was predicting a 7% drop.

Both companies saw a steep decline in sales for their larger models. Sales of Ford's pickups and vans tumbled 39% while sales of SUVs plunged 53%.

Toyota, the No. 2 automaker in terms of U.S. sales, saw sales of SUV models tumble 17% and pickup sales fell 12%

Plunging sales of light trucks are a huge problem for all three companies. Light trucks account for about 40% of Toyota's sales, 60% of GM's sales and roughly two-thirds of Ford's sales.

But even sales of cars, which are typically more fuel efficient than light trucks, fell for the three largest auto companies. GM's car sales fell 14%. Ford reported a 9% decline in car sales in August while Toyota's car sales slipped 4% from a year earlier.

Limited supplies of some of Toyota's fuel efficient models hurt the company. Sales of the Prius, the most popular gas-electric hybrid model of any automaker, fell 4%.

Honda Motor (HMC), which had been forecast to report a 1% gain in sales, instead reported that sales fell 7% in the month. Sales of its car models declined 5% and light truck sales tumbled 10%.

While Honda was able to get enough hybrids to dealers to post a 30% jump in sales in that segment, sales of hybrids only accounted for about 2% of its overall sales. Still, Honda said hybrids were an important part of the company's strategy.

"Meeting the demand for fuel-efficient vehicles remains a priority," said Dick Colliver, executive vice president of sales for American Honda.

Tougher times ahead

Ford, which has reported a year-to-date sales decline of 16%, trimmed both its outlook and its production plans for the rest of the year.

Ford said its forecast for full-year industrywide sales in the U.S. to the low end of its previously announced range of 14 million to 14.5 million.

And in response to the weak sales and outlook, Ford said it would cut second-half production plans by about 5%, trimming 20,000 vehicles in the third quarter and 30,000 vehicles in the fourth quarter

Even with the better than expected results at GM, auto experts are predicting that this will be the worst August for auto sales in 15 years. Edmunds is forecasting a 14% drop in sales industrywide.

Sales are expected to be slightly higher than the dreadful results in July -- which was the weakest month based on seasonally-adjusted sales since 1992.

Gasoline prices declined throughout August, falling about 10% from the record $4.114 set on July 17. But continued job losses and home price declines, coupled with low consumer confidence, kept many potential car and light truck buyers on the sidelines.

The other member of Detroit's Big Three, Chrysler LLC , is also expected to report a drop in sales from year-earlier levels later Wednesday.

Nissan Motor bucked the trend, reporting that is August sales rose 13.6% -- much higher than Edmunds' forecast of a 2.3% gain. Sales of Nissan's cars fell about 1% from a year ago but light truck sales jumped 35%.

But even in that segment, buyers were moving to smaller more fuel-efficient vehicles. Most of the sales gains were attributed to the rollout of the Nissan Rogue, a so-called crossover vehicle which is a small SUV with a more car-like ride, the Xterra, a small SUV, and the Frontier midsize pickup.

Nissan's boost in sales follows incentives hike

BY JEWEL GOPWANI • FREE PRESS BUSINESS WRITER • September 4, 2008

Nissan Motor Co. in August posted the largest incentive boost of the six biggest vehicle sellers in the United States, according to Autodata Corp. estimates. That analysis helps explain why it was the only one of those companies to post a gain in sales last month.
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Nissan raised its incentives by $603, or 23.9%, to an average of $3,124 per vehicle in August, the same month that the automaker's sales rose 13.6%.

The industry average for incentives rose by $190, or 7.2%, to $2,838 per vehicle.

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