U.S. auto sales decline in July

High gas prices and exacting consumers made U.S. auto sales take a dive across the industry in July. General Motors reports  a 22.3 percent decline Wednesday and Ford representatives say their sales are 19.1 percent down.

Photo: U.S. auto sales decline in July

Toyota Motor Corp. sold more vehicles than Ford Motor Co. in July, but the Japanese automaker's U.S. sales still were down 7.4 percent after record-setting sales a year ago. Toyota's truck sales were flat thanks in part to heavy incentives, but its car sales fell 11.8 percent. For the year to date, Ford still held a lead of 11,561 vehicles over Toyota.

General Motors Corp. said overall sales were down 9.4 percent for the year. Paul Ballew, GM's executive director of global market and industry analysis, said GM's sales were down largely because the company had strong sales in July of last year. But the industry overall saw soft sales on both coasts and in the upper Midwest.

He said GM's U.S. market share likely will be around 24.5 percent, its highest monthly share of the year. Still, the company is not meeting targets set in its restructuring plan.

"This is certainly not the way we wanted to start the summer selling season," Ballew said.

Nissan Motor Co. was the only major automaker to report a sales increase for the month, of 1.7 percent, because of the addition of the subcompact Versa and the Altima coupe to its lineup. Nissan sales were up 4.2 percent for the year.

But for most companies, the news was dismal. Ford's U.S. sales were down 12.2 percent for the year. Part of the decline came from cuts in sales to rental car companies, according to Ford's top sales analyst George Pipas. Ford slashed rental sales by 57 percent, or 14,000 vehicles, in July as part of a broader effort to reduce rental sales by 30 percent in 2007.

Ford said one bright spot was sales of crossover vehicles, which were up 40 percent for the month thanks to new entries like the Ford Edge and Lincoln MKX. GM and Honda also reported brisk sales of crossovers.

Honda Motor Co. said its U.S. sales were down 7 percent for the month, including a 9.7 percent drop in truck sales.

DaimlerChrysler AG said its U.S. sales fell 9.1 percent in July. Chrysler Group said sales were down 8.4 percent for the month, while Mercedes-Benz said U.S. sales fell 13.9 percent from the same month a year ago.

Erich Merkle, vice president of forecasting for auto consulting company IRN Inc. in Grand Rapids, said with high gas prices and rising rates on adjustable mortgages and home equity loans, consumers simply have less money to buy cars.

"You've got a consumer right now that's really being stretched," Merkle said. "In many cases debt levels are incredibly high to the point where you're seeing a lot of foreclosures."

The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 24 sales days last month and 25 in July 2006.