July car sales increase eases economic worries

DETROIT - Summer promotions and easier credit lured shoppers back to car buying last month, a relief to an industry worried about June's sales slowdown.

Every major automaker except Ford and Daimler said that July sales topped those in June. The biggest monthly sales gains were posted by Nissan, Toyota, Volkswagen, Subaru, and Kia.

The industry sold just over one million cars and light trucks in July. That's 6.6 percent higher than in June, when worries were growing that the economic recovery might be faltering. Sales also were 5.1 percent higher than in July 2009, a year in which sales fell to a 30-year low.

Pickup trucks and luxury cars were big sellers. Ford Motor Co. said July was the first month in 21/2 years in which it sold more than 50,000 F-150s. Sales of the Toyota Tundra full-size pickup jumped 40 percent over last July. The newly redesigned Jeep Grand Cherokee also saw sales jump.

Cadillac's SRX crossover, also redesigned this year, saw surging sales - up 750 percent over last July - and Acura sales were 45 percent higher.

Jesse Toprak, vice president of industry trends and analysis at the car pricing website TrueCar.com, said growth in truck and luxury sales is a positive sign because buyers are most likely to hold off those purchases when times are tough.

Toprak said there is a great deal of pent-up demand in the market now.

July sales put the annual rate on pace to reach 11.98 million, higher than last year's total 10.4 million, but still far from the peak sales of 16.9 million in 2005.

"The industry recovery continues to be very modest but also continues to be in the right direction," said Bob Carter, a Toyota Motor Corp. group vice president.

As long as employment continues to improve and gas prices stay below $3 a gallon, "sales should rise on a gradual basis," said General Motors Co.'s chief economist Ted Chu.

GM's sales rose 2.6 percent over June and 5.4 percent over last July. Newly launched models such as the Chevrolet Camaro muscle car, Chevrolet Equinox crossover, and Buick LaCrosse sedan showed strong increases.

Ford's sales were flat from June but up 3 percent over last July. Ford's overall sales were weighed down by a double-digit drop in Mercury sales. Mercury production stops at the end of this year.

Japan's Toyota Motor Corp. and Honda Motor Co. saw sales rise from June - 20.3 percent for Toyota and 5.4 percent for Honda - but both saw small decreases compared with last July.

Toyota is still suffering from a rash of safety recalls earlier this year, Toprak said, while Honda hasn't acted as aggressively as other automakers to lure Toyota buyers. Both said last year's Cash for Clunkers program created huge demand for small cars that wasn't matched this year.

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Nissan Motor Co. said July sales soared 28 percent from June on brisk sales of cars and small SUVs. Sales rose 15 percent compared with July 2009.

Volkswagen sales were up 13.4 percent from June and 16 percent from July 2009. Sales of the Golf small car jumped 193 percent from last July.

Kia sales rose 11 percent from June and 21 percent from July 2009, helped by new models like the Sorento crossover and the Soul hatchback.

Subaru sales rose 11 percent compared with June and 10 percent from July 2009, led by the Outback crossover.

Hyundai sales rose 6 percent from June and 19 percent from July 2009 on strong sales of midsize and smaller sedans such as the Sonata and Elantra.

Daimler sales slipped 5 percent from June, but compared with July 2009, sales were up 7 percent.

Strong sales of Mercedes-Benz luxury cars offset plunging interest in the Smart minicar.