US auto sales accelerated to the best pace since October 2007 as major automakers posted double digit gains Wednesday and forecast more growth in the months to come.
Total industry sales rose 17 percent when compared with August 2012 while the sales pace jumped to an adjusted, annual rate of 16.1 million, according to Autodata.
That's up from 15.8 million in July and the first time the sales pace topped 16 million since the US auto industry sank into a deep downturn that led to the bankruptcies of General Motors and Chrysler.
"The news is even more positive than the overall numbers imply, as individual car buyers, not fleet sales, are behind the surge," said Michelle Krebs, an analyst with automotive site Edmunds.com.
"The stars are aligned for strong retail sales: great new product, widely available cheap credit, and a desire and need by car buyers to purchase a new vehicle to replace their likely aged one."
Ford economist Ellen Hughes-Cromwick said that while it was not time to get "irrationally exuberant," recoveries in the housing and jobs market and a historically high average age for vehicle on the road "should give us some good support going forward."
While the short-term outlook for the industry remains quite good, Kelly Blue Book analyst Jack Nerad cautioned that "the overall economic recovery is weak and fragile, so another shock could send sales back."
"Right now, based on three years of pent-up demand, an aging national car fleet, artificially low interest rates and some glimmers of hope that the economy is really developing some momentum, the auto industry is out-performing the growth of the overall economy," Nerad said.
"But that doesn't mean that sales will continue at the strong pace we've seen in August."
Toyota surged past Ford to win second place in August as sales jumped 23 percent to 231,537 vehicles.
"The auto industry continues to be a bright spot in the economic recovery," said Bill Fay, Toyota division group vice president and general manager. "August capped a great summer for new vehicle sales and it was Toyota's best month in more than five years."
Ford was not far behind as sales rose 12 percent to 221,270 vehicles.
They were constrained by "tight inventories in some of our most popular models and a temporary pullback in fleet sales," said Ken Czubay, Ford's sales chief.
GM's sales rose 15 percent to 275,847 vehicles, the highest so far this year and the best since September 2008.
"The second half of 2013 is off to a very solid start for GM and our model-year change over and new product launches are going smoothly," said GM sales chief Kurt McNeil. "We have a lot of momentum and we feel good about the direction of the US economy as we prepare to launch even more new products."
Chrysler's sales rose 12 percent to 165,552 in the automaker's best August performance since 2007.
"All aspects of our business continue to improve as evidenced by our streak of 41 consecutive months of year-over-year sales gains," said Reid Bigland, Chrysler's head of US sales.
Honda set a new August sales record as sales jumped 27 percent to 166,432 vehicle. Nissan also set a sales record as sales rose 22 percent to 120,498 vehicles.
Korean automakers, which expanded rapidly during the downturn, posted more modest gains.
Hyundai sales rose just eight percent to 66,101 while Kia sales grew four percent to 52,025.