But 'we're very encouraged by what we saw in August,' he said. 'Consumers are feeling better, and we're clearly seeing it in this month's sales across the industry and at General Motors.' Still, the selling pace was far below last August's annualized rate of 16.3 million light vehicles. And Detroit's automakers continue to bear the brunt of the market's steep decline this year. It contracted 15.5 percent in August. GM, Ford Motor Co. and Chrysler LLC reported even bigger declines -- 20.3 percent for GM, 26.5 percent for Ford and 34.5 percent at Chrysler, which is struggling to hang on to fifth place in the U.S. market. According to Autodata Corp., the domestic brands' combined market share shrank to 45.3 percent from 50.9 percent a year ago. But their share was above a low of 42.7 percent recorded in July. Auto executives and analysts said the U.S. automakers benefited from a slowdown in the consumer exodus out of trucks and SUVs and into smaller, more fuel-efficient cars. Compared with last year, truck sales were down sharply and small car sales were higher in August, said Ford market analyst George Pipas. But, compared with the recent monthly sales patterns, 'sequentially, you see a somewhat improved picture for trucks and SUVs,' Pipas said. For instance, full-size pickups boosted their share of total sales to 12 percent in August from 9 percent in May and June, he said. 'We're not indicating that the truck industry is snapping back,' LaNeve said. But he said the figures suggest that 'we saw the bottom four-five months ago, and that the business as a percentage of the industry is stabilizing.' Auto executives said the trend partly reflected pent-up demand for trucks from consumers who had held off purchases in recent months and were encouraged by the drop in fuel prices in August. 'We've seen gas prices come down about 40 cents a gallon since mid-July,' said Ford economist Ellen Hughes-Cromwick. Such a decline has the economic impact of a big tax cut, she said. But analysts said the slight recovery in demand for larger vehicles was also due to generous discounts, such as GM's offer of employee pricing for all to celebrate its 100th anniversary. 'We had all these promotions artificially increasing demand for SUVs and trucks,' said Jesse Toprak, market and pricing analyst at Edmunds.com, an online auto research site. According to Edmunds' estimates, incentives on full-size pickups increased to a record $5,629 per truck, on average, from $5,417 in July and $4,392 last August. In addition, Toyota Motor Corp. and Honda Motor Co. struggled to keep up with demand for fuel-efficient hybrids, such as the Toyota Prius, and subcompacts such as the Toyota Corolla and Honda Fit. 'The Fit was down 25 percent, and it should have been up 100 percent if they'd had the inventory,' Toprak said. Honda pushed up the launch date for the redesigned Fit by a month and began selling the cars in late August to meet demand. But with demand for its light trucks sagging, Honda's sales were down 7.3 percent in August, and Toyota's sales fell 9.4 percent. Toyota has halted output of large trucks and SUVs in North America to trim its inventories, but the Japanese automaker also was encouraged by the drop in oil prices and other economic indicators in the past month. 'We're guardedly optimistic that August may be the beginning of a trend to pull us out of where we were,' said Irv Miller, group vice president of Toyota Motor Sales USA. Nissan Motor Co. increased its sales by 13.6 percent last month after spending about $1,000 more per vehicle in incentives than its leading Japanese rivals, according to Edmunds. Overall, Asian brands increased their share to 47.3 percent last month, while European brands took 7.4 percent. Among the U.S. automakers, Ford pared its North American production forecast by 50,000 vehicles for the second half of the year to 890,000, reflecting expectations of a gradual recovery. 'We do still have sizeable headwinds out there,' notably the housing crisis and credit crunch, said Ford's Hughes-Cromwick. 'Our best guess is that it will take several months for those conditions to improve,' she said. Ford and GM expect full-year sales close to 14 million cars and trucks, the weakest since 1993. GM, which described August as its best sales month this year, increased its production forecast for the third quarter by 20,000 vehicles. Both Ford and GM reported big inventory reductions in August from year-earlier levels. While some analysts, including Ford's Pipas, worried about a backlash in September after last month's incentives-fueled sales, LaNeve was less concerned. 'I'm not anticipating a whole lot of payback, but I might be wrong,' he said. Chrysler, the hardest-hit of the major players in the U.S. market, attributed its huge sales drop to reduced fleets and shifts in buying patterns. Of the U.S. automakers, it is the most reliant on demand for big vehicles. The Auburn Hills automaker said sales were up 12 percent from July, but its executives expect tough times for the rest of 2008. 'I believe there is a little pent-up demand, we just don't know how long it will stay pent,' said Steven Landry, Chrysler executive vice president for North American sales. Chrysler attributed the bounce from July's lows to enhanced financing offers and improved demand for key vehicles such as the Chrysler Town & Country minivan. Its sales were up 15 percent. Chrysler also trimmed its inventory by 15 percent from last year's levels to 380,560 vehicles. 'That's the lowest our inventory has been since August 1995,' Landry said. Reach Christine Tierney at (313) 222-1463 or [email protected].