July U.S. auto sales mostly flat

U.S. auto sales by General Motors and Ford were flat to slightly higher in July compared with June, the companies reported Tuesday.

Analysts said the fact that Americans are still willing to spend on big-ticket items is a good sign.

But they warned the gains could be short-lived because shoppers remain anxious about slow economic growth and hiring.

GM's sales rose 2.6 per cent over June and five per cent from July of last year, helped by promotions aimed at making room for 2011 models.

Sales of the Chevrolet, Buick, GMC and Cadillac brands jumped 25 per cent over July of 2009.

Ford, which has enjoyed a strong 2010 so far, said its sales were flat from June. They rose three per cent compared with July last year.

Other automakers also reported July sales Tuesday.

Japan's Honda Motor said sales rose five per cent from June.

Hyundai's sales rose six per cent, Kia's and Subaru's sales were each up 11 per cent, while sales for Daimler AG slipped five per cent.

J.D. Power revised its full-year industry sales downward last week, to 11.7 million vehicles from 11.8 million vehicles, citing the inconsistent recovery.

Government stimulus efforts and businesses rebuilding inventory had been fuelling the economic recovery, but those have run their course, and any second-half recovery in the auto industry now depends on consumer spending, said Ted Chu, GM's chief economist.

He said as long as employment continues to slowly improve and gas prices stay below $3 US per gallon, sales should rise on a gradual basis.

"As long as the economy is slowly recovering back, I think pent-up demand is going to continue to be the driver," he said.