GM reports sales increase for July

Associated Press

detroit

General Motors Co. said Tuesday U.S. sales of its cars and trucks rose slightly last month from a slower-than-normal June, a sign that consumers are still willing to spend on big-ticket items.

But the gains could be short-lived because shoppers are still anxious about slow economic growth and hiring.

The company said sales from its four brands — Chevrolet, Buick, GMC and Cadillac — jumped 25 percent over July of 2009. Buick and Cadillac sales more than doubled.

GM’s total sales rose 2.6 percent over June and 5 percent from July of last year, helped by promotions to make room for 2011 models.

Total sales include Pontiac, Saturn and Hummer, brands GM has sold or is discontinuing.

Newly launched models continue to propel GM’s sales, with the Chevrolet Camaro muscle car, Chevrolet Equinox crossover, Buick LaCrosse sedan and Cadillac SRX crossover showing strong increases, the company said.

Industry analysts expected buyers to respond to the usual model year-end promotions advertised in July.

But the market is still vulnerable. Auto sales have been recovering from a 30-year low in 2009, but the pace has been fitful, with month-to-month sales falling as often as they rose in the first six months of this year.

J.D. Power revised its full-year industry sales downward last week, to 11.7 million vehicles from 11.8 million vehicles, citing the inconsistent recovery.

Government stimulus efforts and businesses rebuilding inventory had been fueling the economic recovery, but those have run their course, and any second-half recovery in the auto industry now depends on consumer spending, said Ted Chu, GM’s chief economist.

He said as long as employment continues to slowly improve and gas prices stay below $3 per gallon, sales should rise on a gradual basis.

“As long as the economy is slowly recovering back, I think pent-up demand is going to continue to be the driver,” he said.

All automakers report U.S. July sales on Tuesday. Analysts expect the month to be one of the year’s strongest and better than last July, when the government started its Cash for Clunkers rebate program to resuscitate depressed sales in the first half of last year.