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July sales fall sharply for Ford, GM

Most of the decline is in trucks and SUVs. Toyota and Honda both post gains compared with a year ago.

Published August 2, 2006

DETROIT - General Motors Corp. and Ford Motor Co. said Tuesday their July vehicle sales plummeted from last year, when heavy discounts fueled a near record month for the auto industry.

But Japan's Toyota Motor Corp. and Honda Motor Co. saw their U.S. sales increase - and both credited their reputations for fuel efficiency and strength in small cars for boosting their sales during a period of high gas prices.

Most of the decline at GM and Ford was in trucks and sport utility vehicles, the high-margin items on which domestic manufacturers depend.

GM, the world's largest automaker, said its sales fell 22.2 percent, with trucks falling 31.2 percent and cars inching down 2.7 percent.

At Ford, sales of Ford, Lincoln and Mercury vehicles dropped 35.2 percent from a year earlier as trucks sank 44.8 percent, while cars slipped 6.7 percent. Sales of F-Series pickup trucks, long the country's best-selling vehicle and the company's most important vehicle, skidded 45.6 percent.

Toyota's sales shot up 11.7 percent, with cars up 19.8 percent and trucks up 1.3 percent. The company outsold Ford by more than 17,000 vehicles for the month.

"Market conditions are playing to traditional Toyota strengths of fuel efficiency, a strong passenger car offerings as well as our comprehensive hybrid lineup," Jim Lentz, executive vice president of Toyota's U.S. division, said in a statement.

Honda, meanwhile, said its July sales rose 6 percent, with cars up 5.4 percent and trucks up 6.8 percent. The company said it was unable to keep up with demand for its small cars.

Paul Ballew, GM's executive director of global market and industry analysis, said GM's decline was in line with expectations after inflated sales in the summer of 2005.

Ford said it was heartened by growing retail demand for its new midsize sedans, the Ford Fusion, Mercury Milan and Lincoln Zephyr. Retail sales for the vehicles were up 18 percent over June, the company said.

The nation's second-largest automaker said demand for the sedans should remain high, as 2007 models, with additional safety features and optional all-wheel drive, hit showrooms. They went into production Monday.

But Ford's lineup of new vehicles is thin this year compared to its competitors. In the fall, it is scheduled to introduce two crossovers, the Ford Edge and the Lincoln MKX. The company hopes the more fuel-efficient SUV alternatives will help it hold on to market share as high gas prices cause consumer tastes to shift.

"We had a solid retail month in July," Al Giombetti, president of Ford and Lincoln Mercury sales and marketing, said in a statement. "We are particularly encouraged by the response to our new cars, which offer distinctive styling and outstanding fuel economy. They are definitely the right products at the right time."

In the first seven months of the year, Ford's sales were down 9.7 percent, with trucks falling 17 percent and cars slipping 5.7 percent. GM's sales were down 14.1 percent year to date, with trucks falling 16.7 percent and cars falling 9.7 percent.

[Last modified August 2, 2006, 01:05:57]

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