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U.S. Auto Sales Tumble in July

U.S. auto sales dropped in July as weakness in the housing market sapped demand, increasing pressure on the embattled Detroit-based automakers and hitting Toyota Motor with its first sales decline in almost three years.

General Motorsposted a drop in sales of nearly 19 percent, a downturn that underscored the risks for the No. 1 U.S. automaker a day after it surprised Wall Street by posting stronger-than-expected second quarter results.

Toyota Motor on Wednesday reported that its U.S. July sales slipped 3.5 percent. It was the first year-over-year sales decline for the Japanese manufacturer since August 2004, according to a company spokeswoman.

"The industry stumbled this month, on continued housing weakness," Jim Lentz, Toyota's executive vice president of North American sales, said in a statement. "Though Toyota didn't match last July's record-setting sales, heightened demand for hybrids and crossovers is reassuring."

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Toyota said it sold 224,058 vehicles in the U.S. in July.

Toyota-branded truck sales rose 4 percent, but were outweighed by a 10 percent dip in car sales.

DaimlerChrysler said Wednesday that U.S. sales fell 9% in July, despite market-leading incentives aimed at clearing inventory at Chrysler Group.

Mercedes Benz.
David Zalubowski
Mercedes Benz.

Results for were adjusted for an extra selling day in July 2006.

The automaker, in the process of selling Chrysler Group, sold 156,314 total vehicles in July, down from 171,940 vehicles in the same period a year earlier.

Sales at Chrysler Group, which consists of the Chrysler, Jeep and Dodge brands, fell 8% in July, despite high incentives and a new "lifetime" powertrain warranty on almost all of its new vehicles, rolled out towards the end of the month.

Chrysler Group sold 137,728 vehicles in July. Sales at Mercedes fell 14% to 18,586 vehicles.

Ford Motor posted U.S. July sales that were 19% lower than the year-ago period.

But CNBC's Phil Lebeau reported that truck sales were only down 7.4%, a bit of good news as trucks are "the bread and butter" of the Detroit automaker. And Ford's crossover utility vehicle sales were up 40% in July.

Ford car sales in July were notably weak, losing 30%.

"We are encouraged by the progress we have made and consumers' response to our new products," said Mark Fields, Ford's President of the Americas, in a statement. "At the same time, we know we have a lot of work to do, and July is a sobering reminder of the economic and competitive challenges we face."

Nissan Motor on Wednesday said its U.S. sales rose 5.9 percent in July, driven by strong demand for both its Altima sedans and Versa minis.

The company sold 87,877 vehicles in the U.S. during the month.

U.S. sales in the company's Nissan division rose 7.6 percent, as a 23.4 percent increase in car sales outweighed the decline in truck sales, which were down 10.2 percent.

Sales at the Japanese company's Infiniti division dropped 5.9 percent in July, Nissan Motor said.

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