U.S. Vehicle Sales Up 5%, Aided by Rebates, Subsidies

U.S. vehicle sales increased 5% in July, compared with a year ago, but industry analysts said Tuesday that much of the rebound was due to big spending on rebates, subsidized loans and other incentives.

Japanese auto makers, Ford Motor Co. and General Motors Corp. posted the biggest gains. Unlike the Japanese, however, Ford and GM were forced to offer an array of discounts to move their products.

“The results probably don’t indicate a large amount of strength in sales because we have so many incentives and incentive advertising to push model-year close-outs,” said Susan Jacobs, an independent analyst with Jacobs & Associates in Rutherford, N.J. “The fact that so many models have incentives is the best indicator of softness in the market.”

Ford, the last of the major auto makers to report July sales, said Tuesday that demand for its trucks increased 15%, while its car sales were down 5%. Ford sold a total of 353,749 units--a 5% improvement--breaking its previous July record of 337,778 units set 19 years ago.

Most of Ford’s gain was due to continued strong sales of the Expedition, a full-size sport-utility vehicle, and its pricey, new luxury twin, the Lincoln Navigator. Without them, Ford’s total sales would have been flat.

July’s industrywide rebound came after three consecutive months of softer sales. Ford said it is so optimistic about the sales outlook that it plans to increase its third-quarter production schedule by 30,000 units, evenly divided between cars and trucks.

The Big Three’s combined sales in July increased 2%. GM led the modest surge with a nearly 7% improvement, based on revised figures, while Chrysler Corp. reported Friday that its sales dropped 9%.

Asian auto makers again posted increases that outperformed the Big Three as a group. Japanese and Korean auto makers’ sales were up nearly 13%, led by Honda Motor Co.’s 32% increase and a 15% jump at Toyota Motor Corp.

Nissan was a major exception among the big Japanese auto makers. Its U.S. sales declined 7%.