Easier credit, promotions helped boost US auto sales during July

August 4, 2010 at 12:00a.m.

Associated Press

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 for Ford and Daimler said their 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 1 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 of 2009, a year where 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 that 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 since buyers are most likely to hold off purchases in those segments when times are tough.

Toprak said there is a great deal of pent-up demand in the market now. He expects that to translate into sales gains in the last half of the year, even if the economy hasn’t fully recovered.

Expressed as an annual rate, July sales were at a pace of 11.98 million. That’s higher than last year’s total sales of 10.4 million but still far from the peak sales of 16.9 million in 2005.

Still, July’s gains gave the automakers confidence that a double-dip in car buying doesn’t appear to be developing.

Summer promotions — which usually begin in August but were pulled ahead by the nervous industry — drew out buyers even though cars weren’t any cheaper than previous months.

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.

There is also steady improvement in car-loan approval rates, Chu said. GM announced last month that it would buy a company specializing in loans to customer with poor credit, a significant chunk of new-car buyers.

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.

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.