Auto Sales Hit Highest Levels in Nearly a Year

A large portion of sales came from customers replacing very old vehicles, auto executives and economists said. They noted that consumer confidence remains fragile because customers are concerned about the slow pace of the recovery, as other economic indicators have shown.

"We know this is the slowest recovery we've seen in our adult lives," Mark Fields, Ford Motor Co.'s president of the Americas, told reporters in Traverse City.

In this difficult atmosphere, General Motors Co. performed strongly with fewer brands than it had a year ago, leading the sales gains recorded by all three Detroit automakers in July.

Toyota Motor Corp. and Honda Motor Co. reported lower sales after having benefitted strongly from the cash-for-clunkers program introduced in July 2009.

Nissan Motor Co. and the Hyundai-Kia Automotive Group reported the biggest July sales gains among the major players.

Total car and light truck sales rose 5.2 percent from last July and were up 6.7 percent from June, according to Autodata Corp.

On an annualized basis, the selling rate reached 11.99 million vehicles, the highest level since last August, when cash-for-clunkers deals were available during the entire month to boost a market that had collapsed.

Demand for vehicles appeared to be flagging again in recent months, but July's sales are likely to fall in the category of indicators confirming that a recovery is under way.

"The recent data haven't changed our view of the ongoing economic recovery," said Emily Kolinski Morris, senior economist at Ford. The company expects full-year sales to range between 11.5 million and 12 million vehicles, compared with 10.4 million in 2009.

"It's going in the right direction," TrueCar.com analyst Jesse Toprak said about the economy, "But it's going in the right direction very cautiously. Consumer confidence is still far from repaired, and credit availability is far from what it should be for a full-blown recovery."

GM reported a 6.4 percent rise in monthly sales, the largest among the domestic automakers.

Sales rose in all four of its remaining brands -- Buick, Cadillac, Chevrolet and GMC, with Cadillac sales more than double year-earlier levels. Kurt McNeil, sales and service vice president for Cadillac, attributed the sales increases to pent-up consumer demand and more banks making loans available to customers.