Ford, GM US Sales Rise, But Consumer Doubts Persist

Major automakers posted July U.S. sales that ticked higher from the slump of recent months, but failed to dispel doubts about the strength of the economy and the mood of American consumers

Ford and GM auto sales in the U.S. were up for July 2011, showing some slight improvement in what was considered to be a down month for car buyers.

Graham Crouch | Bloomberg | Getty Images

Ford said its new-vehicle sales increased by 8.9 percent, as the company reported higher car and sport-utility vehicle sales.

"We're still not back on the track of recovery yet," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "There's definitely some weakness kind of looming out there."

While some analysts have expressed concern about signs of soft demand, attributed to economic and recent political uncertainty, Ford has said underlying demand is still growing, albeit at a slower pace than what the company hoped for.

The auto maker said it sold 180,865 vehicles this year compared to 166,092 vehicles last year. Sales of the new Ford Explorer more than doubled from July of 2010, while sales of the Escape compact SUV jumped 66 percent.

Ford, the only member of Detroit's Big Three auto makers that didn't file for bankruptcy protection in 2009, has been outperforming peers for over two years, returning to number two domestically behind General Motors in the process.

General Motors also reported its sales in the U.S. were up 7.8 percent in July, over the same time last year. This is more or less along analysts' expectations, which were 9.9 percent.

General Motors said it sold 214,915 vehicles this year versus 199,432 in July 2010, including nearly 25,000 Cruzes. That could make it America's top-selling car for the second straight month.

Sales of the Chevrolet Equinox and GMC Terrain small crossovers rose 80 percent.

The auto industry has benefited from a broad economic recovery after suffering greatly during the recession. But GM's increase may not be the norm.

Automakers reported a 0.9 percent U.S. sales increase in July from a year earlier with a seasonally adjusted annualized rate of sales reaching 12.23 million vehicles.

Analysts predict that sales of new cars and light trucks in the U.S. rose slightly from a year earlier as few deals and economic worries kept car shoppers home.

VP of GM sales Don Johnson said unemployment, low consumer confidence and uncertainty over the federal debt ceiling scared some buyers off.

"We're seeing that the consumer confidence is pretty fragile right now because of everything that's happened in the past few months," Johnson said.

Meanwhile, Chrysler reported a sales increase by 20 percent in July of this year, versus the same time last year. The auto maker said it sold 112,026 vehicles this year compared to 93,313 vehicles last year. It was helped by new products such as the Jeep Grand Cherokee, which saw sales jump 76 percent.

July auto sales for Toyota fell 22.7 percent this year compared to the same time last year, as it continued to deal with parts shortages caused by Japan's earthquake. The Japanese automaker sold 130,802 vehicles in the U.S. last month, down from 169,224 a year earlier.

Auto sales started strong this year, but have slowed as the economy's growth faltered and Japan's earthquake caused shortages of popular models sold by Honda and Toyota.

Auto sakes for Honda fell 28 percent in July 2010. Yet, Nissan and Hyundai rose 3 percent and 10 percent, respectively.

Kia Motors said its July sales jumped 28.5 percent thanks to strong sales of the new Optima sedan. Sales of the Optima were more than triple last year's numbers.