While auto sales have been lackluster in many parts of the world, and downright horrific in some, sales here in the U.S. have been quite good so far in 2012. Through the first half of the year, sales for the industry as a whole were up 14.8% over (pretty good) year-ago levels -- a rare bit of promising economic news.

Many analysts have expected that trend to slow, with unemployment still high and lots of reasons to think that fewer consumers are willing to spend. But the latest data from Edmunds suggests that the market is still doing well -- and some automakers are doing very well indeed.

The market holds steady, for the moment
For the first half of July, Edmunds' analysts say the rate of U.S. retail auto sales was tracking a little bit ahead of June's surprisingly strong rate. Overall sales last month were up 22% over year-ago numbers, putting an exclamation point on a solid first half of the year for the automakers.


Of course, the totals include fleet sales, and Edmunds' midmonth channel checks don't yield much insight into the pace of those. Still, Edmunds' Jeremy Anwyl says retail sales of cars and light trucks were on track to end up around 999,000, and adding in the historical average for fleet sales -- about 15% of retail in past Julys -- yields a sales rate very close to what was seen in June.

That's good news for the economy. And it's good news for the automakers -- but some automakers are doing better than others.

"Big Three" Japanese automakers continue to surge
Edmunds' reading of the midmonth tea leaves suggests small slips in market share for most of the automakers, and gains for Toyota (NYS: TM) and Honda (NYS: HMC) -- as well as a big increase for Nissan (NASDAQOTH: NSANY.PK).

The gains for Toyota and Honda aren't too much of a surprise, as the two Japanese giants are still moving to reclaim ground lost in the wake of the March 2011 tsunami that disrupted their production lines for months. The increase for Nissan is a little harder to explain -- Nissan's production wasn't hurt badly by the tsunami, and it rebounded much more quickly than its big rivals.

But there may be a couple of other factors at work. Nissan's latest products are strong contenders, and that message is getting out -- helped considerably by the company's use of incentives. Nissan's per-vehicle spending on incentives -- those "cash back" or discounted-financing offers one sees advertised -- trailed only General Motors (NYS: GM) and Chrysler in June, according to estimates from TrueCar.com.

That's both good and bad. Incentives can be useful to help expand a brand, or revive sales of a model that's lagging - but long-term reliance on discounts to move vehicles erodes margins, as the Detroit automakers learned painfully last decade.

Some slippage for the home team
Ford
(NYS: F) has taken that lesson to heart, of course. As its products have been revamped one by one in recent years, Ford has moved to a strategy of offering premium content for a premium price -- while gradually dialing back incentives. TrueCar.com estimated that Ford's incentives spending was under $2,500 per vehicle in June, a big drop from the $3,000-plus levels that were routine just a couple of years ago, and I expect Ford to make a big effort to lower that number further over the next year or two.

Even with lower incentives, the Blue Oval continues to do pretty well: Edmunds expects Ford to hold its market-share ground in July, more or less, even as its hometown rivals lose a bit of ground. GM's market share could drop by 3% in July, says Edmunds, further erosion in a year that has already seen GM lose substantial ground.

That's worrisome, but not unexpected. Despite some recent new products, much of GM's product line is dated and lags the best offerings from strong competitors like Ford, Hyundai, and Toyota. GM is working hard to address this and other problems, and the General is expected to release a slew of new products over the next couple of years.

But meanwhile, GM, like its rivals, will need to make the most of what it has in order to take advantage of an auto market that still seems to have some momentum left.

Thanks to economic concerns at home and abroad, Ford's stock has been under pressure lately, with its stock dropping below $10 a share. But the company is still performing very well at home and is investing heavily for growth abroad. Have these short-term pressures created an incredible buying opportunity, or are there hidden risks with the stock that investors need to know about? To answer that, one of our top equity analysts has compiled a premium research report with in-depth analysis on whether Ford is a buy right now, and why. Get instant access to this premium report.

The article Will Auto Sales Continue Their Momentum? originally appeared on Fool.com.

Fool contributor John Rosevear owns shares of Ford and General Motors. You can follow his auto-related musings on Twitter, where he goes by @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of General Motors and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

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