Cool July for Car Makers: Ford’s U.S. Sales Drop 4.3%

Ford Motor Co.’s U.S. vehicle sales fell 4.3% in July, the company said Tuesday, as lower car sales and a cutback in price discounts offset a modest improvement in truck demand.

Truck sales at the second-largest auto maker rose 5.2% from the year-earlier period to 214,235 vehicles, while car sales fell 17% to 128,948. Excluding imports and heavy trucks, overall sales declined 3.8% to 340,342 vehicles in the quarter, more than expected.

July is shaping up as the year’s slowest month for the auto industry, with an estimated annual sales rate of 14.1 million. Results have been hurt by General Motors Corp. strikes that caused vehicle shortages and by the end of “loyalty” discounts.

“Without incentives to drive them, passenger car sales were down,” said David Healy, an analyst with Burnham Securities Inc. “People will buy trucks and minivans without incentives, but they have to be prodded to buy cars.”

GM, Ford and Chrysler Corp. in June ended loyalty discounts that gave existing customers an extra $1,000 for buying a new vehicle.

Ford was expected to report little-changed sales but still outsell GM, which reports today. Analysts expect GM to post a decline of about 40%.

Chrysler, the No. 3 U.S. auto maker, said Monday that its sales rose 3.2%, less than expected. Toyota Motor Corp. said sales rose 13%, and Honda Motor Co. sales were up 5.6%.

Meanwhile Tuesday, Irvine-based Kia Motors America Inc. said its car and truck sales in the U.S. topped the 10,000 mark for the first time in July, boosting the year-to-date tally to 50,616 units. To celebrate the record, Kia awarded U.S. employees a bonus equal to two weeks’ pay, sources said.

Separately, Volkswagen said U.S. sales more than doubled to 24,056 vehicles from 11,301 in the year-earlier month. The new Beetle model helped the German auto maker record its best U.S. sales month in 18 years. Mercedes-Benz, the luxury-car unit of Daimler-Benz, said July sales in the U.S. rose 53% to 10,310 units on demand for its M-class sport-utility vehicle.

Times staff writer John O’Dell contributed to this report.