After a flat June, auto sales pick up in July

Auto sales this year are turning out to be a lot like the traffic on the local freeways — stop and go.

Many of the automakers saw consumers head back into showrooms in July, helping reverse a slowdown in sales in June. But others had only modest sales gains from a year earlier, and the big Asian nameplates Toyota and Honda posted small sales declines.

“Generally speaking, the numbers we are seeing coming out of July are a positive sign,” said Jeff Schuster, an analyst with J.D. Power and Associates. “But I don’t think that says everything is back on track. We are going to see this volatility and up-and-down movement for some time.”

The industry hit an annual selling pace of 12 million vehicles in July, about 900,000 vehicles above the June rate, according to Autodata Corp.

Brett Hoselton, an analyst at KeyBanc Capital Markets, said he expected the sales rate to continue to improve because of high used-car prices and an increase in the number of shoppers heading into dealerships. He noted that Americans were sending more vehicles to the junkyard than buying new ones, and that automakers still have the financial wherewithal to offer incentives to buyers to spur sales.

“The industry recovery continues to be very modest but also continues to be in the right direction,” Bob Carter, Toyota group vice president, said Tuesday as the automaker and its rivals reported their results.

Sales of General Motors Co. vehicles rose 25% in July compared with the same month a year earlier, after factoring out the Pontiac, Hummer, Saturn and Saab brands it closed or sold as part of its bankruptcy reorganization last summer, according to Autodata.

Total sales for GM’s remaining brands — Chevrolet, Buick, GMC and Cadillac — hit 199,374 vehicles for the month, the automaker said. Including the discontinued brands, sales rose 6.4% to 199,602, Autodata said.

“July’s results are a positive signal,” said Don Johnson, GM’s vice president of U.S. sales. Although they don’t show the economy has “incredible strength,” he added, the results do show “the recovery is still on track.”

Automakers were helped by the calendar. July started with a holiday weekend and included five Saturdays, which was good for car shopping. Easing credit conditions for consumers also helped push sales, GM officials said.

Much of the business in the industry represents so-called replacement demand, said George Pipas, sales analyst at Ford Motor Co.

Most sales are to people and companies that have held on to their vehicles for some time and now need to replace them, rather than to consumers deciding they want some new cool sedan or truck even though their current vehicle is perfectly serviceable, he said.

Pipas also said he believed that GM and other domestic auto companies had survived the worst of the industry downturn.

“Everyone is in a much more positive position than they were a year ago,” he said.

Ford Motor Co. sales rose, but the gain wasn’t as strong as for other automakers. Autodata said sales rose 4.8% to 165,889 vehicles in July compared with a year earlier, after factoring out Volvo. Ford completed its sale of Volvo to Geely Holding Group of China on Monday. Including Volvo, sales rose 3.3% to 170,208.

Chrysler Group’s July sales rose 5% from a year earlier to 93,313. It’s the fourth consecutive month of year-over-year sales increases for the automaker, which has lagged behind Ford’s and GM’s sales gains for most of the year.

Toyota Motor Corp. said its U.S. sales fell 3.2% to 169,224 vehicles compared with a year earlier. American Honda Motor Co. said its sales dropped 2% to 112,437.

The automakers’ year-earlier sales comparisons include the five days of July 2009 when the federal “cash for clunkers” stimulus program began.

“The Japanese brands started to get the benefit of the cars program a year ago right out of the gate, and that explains why they are down a bit this month,” Schuster said.

Other Asian automakers posted big gains.

Hyundai Motor America said its sales rose 18.8% to 54,106 vehicles in July. That was the South Korean company’s best July figure ever and marked only the fourth time that Hyundai had surpassed 50,000 vehicles in a month. Hyundai was helped by brisk sales of its redesigned Sonata sedan and its Tucson SUV.

Nissan North America Inc. said its July sales rose 14.6% to 82,337 vehicles from a year ago.

Meanwhile, GM said Tuesday that it would make its first investment through a new, $100-million General Motors Ventures fund by providing an initial $5 million for the electric vehicle company Bright Automotive.

GM Ventures eventually will have a minority stake in the Indiana start-up, which will have access to General Motors’ technology to start developing and producing its IDEA plug-in hybrid.

jerry.hirsch@latimes.com

Times staff writer Tiffany Hsu contributed to this report.