Auto assembly lineMost automakers reported solid sales gains last month, despite fears that the nation's fledgling economic recovery may have stalled. Among domestic makes, Ford Motor (F), General Motors and Chrysler Group all reported percentage increases in the single digits. However, Japanese auto-giants Toyota Motor (TM) and Honda Motor (HMC) both reported that sales fell as they failed to keep pace with year-ago sales, which were bolstered by the government's popular "cash-for-clunkers" program.

GM was first out of the gate, reporting its total sales rose 5.4% in July. Excluding its orphaned brands, the Detroit automaker said overall sales rose 24.6% above last year's levels at its remaining Buick, Cadillac, Chevrolet and GMC divisions. On a percentage basis, Buick and Cadillac reported the best gains for the month, rising 137% and 142%, respectively, compared to July 2009. Chevrolet sales rose 12%, and GMC picked up 27.2%.

"Our July results again reflect that each of our brands has contributed significantly to our gains," said GM's new vice president of U.S. sales, Don Johnson. On a conference call with investors and media, Johnson said GM continued to make progress despite a slowdown in the economic recovery. Despite talk of a double-dip recession, he said, "from our standpoint we actually see a low risk of that," barring a strong economic shock, such as a spike in oil prices.

A Party for the Fiesta

At Dearborn, Mich.-based Ford, a pickup in demand for trucks helped offset slower sales of cars and sport-utility vehicles. In total, Ford sold 170,411 vehicles for the month, up 3.1% compared to last year. As a group, van and pickup truck sales rose 27.4%, while car sales slipped 5.6%, and those of SUVs fell 8.4%. Sales at Volvo, which Ford agreed to sell to China's Zhejiang Geely Holding Group in March, fell 33%. The companies completed the sale agreement on Aug. 2. Excluding Volvo, Ford said July sales rose 4.6% compared to July 2009.

In its second month in the U.S. market, the new Ford Fiesta subcompact sold more than 3,300 copies last month, Ford said. Some of those sales, however, may have come at the expense of the slightly larger Focus, which saw year-over-year sales tumble nearly 30%. Sales at Ford's doomed Mercury division slipped 33%. Ford is discontinuing the brand later this year to devote greater resources to its luxury Lincoln and namesake Ford brands. Overall sales at Lincoln last month fell 16.3%, but retail sales rose 7%, Ford said.

Chrysler reported its sales gained 5% in part due to higher sales of its Jeep Grand Cherokee, a new version of which hit dealer lots last month. Demand for the midsize SUV rose 54% compared to July a year ago, the company said. In a statement, U.S. sales executive Fred Diaz, who also heads Chrysler's Ram truck brand, said Chrysler anticipates that the introduction of additional 2011 models will bolster sales in future months. The Auburn Hills, Mich., automaker is on track to overhaul the remaining 75% of its model lineup, it said.

The Ghost of "Cash for Clunkers"

Things weren't nearly as rosy at recall-weary Toyota, which reported an overall decline of 6.8% last month, compared to last year. Overall sales reached 169,224, putting the world's largest automaker in third place for the month in the U.S. market.

Toyota reported sales at its namesake Toyota division fell 7.2% to 150,629 vehicles. Those at its Lexus luxury-car unit were down 3.3%, held up largely due to strong demand for the newly redesigned GX 460 luxury SUV, which nearly doubled. The GX 460 was the subject of safety recall in April for fixes to its electronic stability control system.

Toyota's inability to keep pace with last year's sales, which were some of the worst on record, was affected in part by a surge in demand last year amid the federal "cash-for-clunkers" program, which began in the final days of July 2009. Toyota was one of the largest beneficiaries of that incentive, which offered rebates of up to $4,500 to consumers who traded-in gas-guzzling vehicles for more efficient ones.

Models such as the gas-sipping Toyota Corolla compact sedan were among the most popular bought under the cash-for-clunkers program. Against that backdrop, Corolla sales had a hard time keeping pace last month, tallying 11% fewer sales, although Toyota still managed to sell more than 27,000 units. Sales of Camry, perennially one of the most popular vehicles in the U.S., actually rose 3%. The popular sedan was among the models recalled for problems related to unintended acceleration, which has become the source of federal scrutiny into Toyota's actions to remedy the problem.

A Tumble for Honda's Top Models

Things were similarly gloomy at Honda, which reported a surprising 5.6% drop in the number of cars and trucks sold in July. Similarly to Ford, Honda sales were propped up by demand for its trucks, which rose 30%. Passenger cars sales, however, slipped 23.3%, the company said in a statement. Sales of its two most popular models, the Honda Accord and Civic, fell by 18% and 25.5%, respectively.

"A year ago the 'cash-for-clunkers' program began, and sales of fuel-efficient Honda vehicles picked up quickly at the end of the month," John Mendel, executive vice president of sales at Honda's American unit, said in a statement. "Although July sales declined versus last year, our sales increased compared to June 2010, which is a positive sign."

If U.S. showrooms were less-than-bustling at Honda and Toyota, they appear to have been nearly overrun at Nissan Motors, which reported a 12% rise in the number of vehicles sold. Some analysts had expected Nissan sales to surge as much as 22%, but July still marked a good showing for Japan's third-largest automaker. Nissan was helped in part by strong demand for its Rogue small SUV, sales of which rose 62% compared to last year.

Other Asian Carmakers Revved Up


Overall, July was expected to be the strongest month for auto sales so far this year and the best since July 2009, when the government's clunkers program was gaining steam. "This year, seasonal incentives started earlier than in years past, which really helped boost incentives and picked up sales this month," said Jessica Caldwell, analyst at auto information website Edmunds.com. "Typically, August is when manufacturers really start to push previous year models off dealership lots."

Among other Asian manufacturers, Japan's Subaru reported 10% higher sales last month to 23,983 vehicles from 21,839 a year ago. Sales of the newly redesigned Legacy sedan rose 37% to 3,208, while those of the Outback sports-utility vehicle gained 81% to 4,971. Both vehicles are made in Subaru's Lafayette, Ind., plant.

Mazda reported selling 20,732 vehicles last month, an 8.9% increase over last year. The carmaker said increasingly popular crossover vehicles helped drive the increase, with sales of CX-7 models gaining nearly 94%, while those of the larger CX-9 rose 48.4%

South Korea's Hyundai Motor and Kia Motors also reported gains. Hyundai said its sales rose 19% from a year ago, making July's U.S. sales the second best on record. The company sold a total 54,106 vehicles in July, marking only the fourth month it exceeded sales of 50,000 units in the U.S. Hyundai's sister company, Kia, also had its second best month on record. U.S. sales climbed 20.7% to 35,419 vehicles compared to 29,345 in July a year ago, Kia said.

A Solid Month for German Brands

Volkswagen said U.S. sales in July rose 16% to 23,880 vehicles from 20,591 a year earlier. Sales of the GTI slumped to 833 units last month compared with 1,351 units in January 2007. Sales of the Jetta compact sedan also fell, by about 15%, but the company's CC luxury sedan saw a 140% jump in sales, compared to last year. "With the exception of last August's 'Cash for Clunkers' sales, July marked the best sales month for Volkswagen of America since December 2005," the German automaker said in a statement.

Mercedes-Benz reported U.S. sales of its cars and vans rose 11.2% last month from July of last year, selling 18,048 vehicles, up from 16,228 in July of 2009. Fellow German luxury make Porsche reported that sales jumped 75% in the U.S. market. Porsche sold 2,703 vehicles in July, up from 1,544 a year ago, making July the best single-month sales for the sports-car company in two years.

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11 Comments

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ruthaf

What's going to happen when gas is $4.50 per gallon again? How many Cadillacs do you think will be sold then?

August 04 2010 at 8:25 AM Report abuse rate up rate down Reply
fdgordo

I hope these new car buyers love their recent purchases. I liked my new Cadillac SLS in 2005. However, when the time came to trade last year, I could not believe how fast and how much this car has depreciated! I might has well have taken the money and burned it instead of buying a vehicle that doesn't hold any reasonable value in a few years!

August 04 2010 at 7:57 AM Report abuse rate up rate down Reply
floatgod

Well, AOL is citing numbers all over the board. What can you believe? Here is a quick analysis of what happened last month. Big 3 sales of cars and light trucks were up 5.0% from the previous month. Foreign brands were up in sales of trucks and cars 5.2%. The Bid 3 sold 21,846 more vehicles in July 2010 than they did in June 2010. The foreign brands sold 30,278 more vehicles in July 2010 than they did in June 2010. Toyota and Honda had sales drops from the previous month, but this was more than offset by booming sales of Nissan, Hyundai and Kia. Market share for the U.S. companies was 44.1% in July 2010, down from 44.2% in July 2009. Apparently AOL is now on the Big 3 payroll.

August 04 2010 at 12:23 AM Report abuse rate up rate down Reply
jbluhm1951

The eoonomy is beginning to get much stronger. People are spending, but people have paid down their debts, they have saved more than ever, and the stock market is about to take off, and when it does jobs will be created as well. The government needs to get out of the way and stop daily making so many bad moves. With all the negative garbage this administration has thrown at us the United States is still strong and will get stronger after the @)!) event. Elect Conservatives who will represent the people and things will rock. Great time to buy equities is now.

August 03 2010 at 9:44 PM Report abuse rate up rate down Reply
L R Adams

Two of the top three Car Rental companies updated their rental fleets. The public didn*t buy the cars. GM* Chrysler and Ford did a *Monty Hall* with them.

August 03 2010 at 9:36 PM Report abuse -1 rate up rate down Reply
praveen99

Here's a chart at US auto sales since 1950, which shows just how extreme the dropoff was in 2009:

http://www.hiddenlevers.com/hl/u?9e9BjI

The good news for automakers is that car sales typically rebound quickly - as they did off of lows hit in 1975, 1982, and 1991. Still, the industry has never seen a drop like the one which just occurred, and it could signal a new normal in which car sales do not rebound to 16 million units for years. That would probably spell the end of at least one major maker (Chrysler?).

August 03 2010 at 9:33 PM Report abuse rate up rate down Reply
1 reply to praveen99's comment
praveen99

Chart URL - http://www.hiddenlevers.com/hl/u?9e9BjI

August 03 2010 at 9:34 PM Report abuse rate up rate down Reply
Mike

OK ANOTHER VIEW,
Make the cars last longer witch is obvious, Cars now will last 125 to 200 thousand miles if you like(forget the image pressure from the stuffy nieghbors)You have no debt and the automakers will bring big discounts for reduced sales.
2011 willbe a great year to buy a car!!!!!

August 03 2010 at 9:01 PM Report abuse rate up rate down Reply
Mike

Pretty obvious there was no lap from prior.
Sure the numbers look better, the cars that were to be replaced last year were driven another year.
What a way to spin the automakers are doing better.
Don't invest in the small 3. you will get burned BOY.

August 03 2010 at 8:55 PM Report abuse -1 rate up rate down Reply
Jen

They warmed up because they wanted to move 2010 models to introduce 2011 with less inventory. How stupid

August 03 2010 at 7:18 PM Report abuse +1 rate up rate down Reply
drallenbob

Wait until the American companies release electric cars that the average person can afford and see how many people pick up one of those toys, especially after the word is released about how much better the driving experience is with one.

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http://www.cubecheck.com

August 03 2010 at 6:29 PM Report abuse +2 rate up rate down Reply