Auto Sales Heat Up in July After Slowdown

U.S. auto sales heated up again in July, after a surprising slowdown a month earlier, even as Detroit's traditional Big Three automakers had mixed results.

Buoyed by high incentives and low interest rates, Wall Street analysts say light vehicle sales industrywide hit a seasonally adjusted annual rate between 17.1 million and 17.5 million for the month.

That would be down from a 17.8 million annual rate in May, when car sales made their strongest showing of the year so far. But it would be much better than a 15.4 million rate in June, when sales plunged to a nearly six-year low.

At Ford Motor Co. (F), one of the first major automakers to post results, July sales fell 6.8 percent.

The second-largest U.S. automaker has steadily lost market share to Asian and cross-town rivals this year.

Ford's results exclude its import brands and some medium- and heavy-duty trucks and were adjusted by Reuters for the number of selling days.

On the bright side, Jim O'Connor, Ford's group vice president for North American marketing and sales, said July was the company's best retail sales month this year.

Ford has been trying, with limited success, to become less reliant on low-margin fleet and daily rental sales.

Ford and General Motors Corp. (GM) have seen their inventories of unsold vehicles swell to near-record highs in recent months, and analysts have said poor July sales could force them to cut production later this year.

GM sweetened its consumer incentives program on Tuesday, and said it was offering cash rebates of up to $2,500 on some of its 2005 model vehicles, in a bid to boost sales going forward.

GM and the Chrysler unit of DaimlerChrysler AG (DCX) were due to report their U.S. sales later on Tuesday.

Chrysler has been alone among Detroit automakers in gaining market share this year, boosted by the success of its new Chrysler 300 flagship sedan.

Among foreign-based automakers, Nissan Motor Co. Ltd. (search) said U.S. sales jumped 31 percent in July.