Consumers are buying cars, but some automakers' sales aren't improving

July was one of the strongest months for U.S. auto sales since taxpayers subsidized last summer's cash-for-clunkers buying spree, according to industry data released Tuesday.

Sizable incentives and easier credit put more buyers behind the wheel in July, as most automakers enjoyed an increase from June sales, and many saw sales go up compared with one year ago.

The healthy July sales figures run counter to recent consumer-sentiment surveys but align with data showing that Americans are willing, if they get a good deal, to spend money on manufactured goods. And automakers' customary summer deals were in full swing in July.

"There is a lot of pent-up demand as new auto sales have been depressed for over two years at this point," said Jessica Caldwell, an analyst at Edmunds.com, a Web site that tracks the auto industry. "There are buyers that simply can't wait any longer on a new vehicle purchase."

General Motors said that domestic sales of its four core brands -- Chevrolet, Cadillac, Buick and GMC -- rose 25 percent compared with July 2009. Factoring in the brands that GM is shedding -- Saturn, Hummer, Saab and Pontiac, which drag on company sales figures -- GM's sales were up 5 percent compared with July of last year. The Chevy Silverado pickup truck had a good July, as did the Buick Regal.

General Motors paid more than any of the five other top automakers to sell its cars to consumers, however, shelling out an average of $4,093 per vehicle in July, well above the industry average of $2,753 per vehicle, Edmunds.com said.

Sales of Jeeps and Ram pickup trucks gave Chrysler a boost, and the smallest of Detroit's Big Three automakers said last month's sales were up 5 percent from July 2009. This is good news for a company that has spent most of the past two years in constant turmoil -- from free fall into bankruptcy to its current partnership with Fiat.

But the news wasn't good for every automaker.

Ford -- the only Detroit automaker not to accept a government bailout -- said July sales were flat compared with June. Mercury has been a drag on Ford sales, and the company is phasing out the brand at the end of this year. Ford has pared back the amount it is paying consumers, reducing its average incentive from $3,288 per vehicle in July 2009 to $3,118 last month, according to Edmunds.com. Ford has taken market share from its Big Three rivals during the recession and is eager to keep momentum.

Toyota, still struggling with quality problems, saw a 20 percent increase in sales from June to July. But compared with July 2009 -- one of the worst years in decades for the industry -- sales were down 3.2 percent. Honda also reported a 5 percent increase from June to July, but was off 2 percent compared with July 2009.

On the other hand, Korea's Hyundai continued its strong 2010 showing, thanks to demand for its Sonata and Elantra sedans, with July sales up 6 percent from June and up 19 percent from July 2009. Kia, which is 38 percent owned by Hyundai, said July sales were up 11 percent from June and up 21 percent from July 2009.

Japan's Nissan had a terrific July, with sales up 28 percent from June, as buyers snapped up the automaker's small sedans and SUVs. And, in a sign that some people may think the recession is over, Daimler AG's July sales -- driven by Mercedes-Benz -- were up 7 percent from July 2009.

Overall, July was a good sales month, but it should have been better, Caldwell said, given the Fourth of July holiday weekend, the good weather and the strong incentives.