U.S. Auto Sales Hit Record Highs

 Supercharged by wildly popular employee discount plans from domestic automakers, auto industry sales in the United States soared to a historic high of 1.8 million passenger cars and trucks, up 16.1 percent from a year ago. 



 General Motors Corp., Ford Motor Co. and Chrysler all posted a strong month as they halted, at least temporarily, a decades-long slide in market share in the face of stiff competition from import brands. 



 The records weren't exclusive to the U.S. brands, though, as several Asian automakers posted record months without matching the price cuts. 



 A ``rising tide of bargains lifted the market industrywide,'' said Jim Press, president of Toyota Motor Corp.'s U.S. sales unit, which posted the best July in its 48-year history. Honda Motor Co., Nissan Motor Co. and South Korean automaker Hyundai Motor Corp. also posted record July sales. 



 GM set the stage for the blistering sales performance in June when it launched its employee discount plan, selling most models at the same price that GM employees pay. Ford and Chrysler matched it with their own discount campaign last month. 



 The price plans, while exciting customers, didn't represent much of a bargain over Spring prices that already were steeply discounted by an average of more than $3,000 per vehicle, including cash rebates and other incentives, said David Healy, auto industry analyst with Burnham Securities Inc. 



 July ``was a marketing masterpiece of smoke and mirrors,'' he said. 



 Indeed, automakers claim that July incentive spending, including the employee discounts, was only marginally higher than in past months. But the plans, hailed by some for their simplicity, let GM, Ford, and Chrysler enjoy big sales boosts. 



 Ford led the sales advance, posting a 28.5 percent gain compared to July, 2004. Chrysler sales in July were up 26.6 percent -- excluding its Mercedes-Benz stablemate -- and GM reported a 15.2 percent gain. 



 The spurt of enthusiasm for domestic vehicles gave Ford its best-ever month for its F-150 pickup sales, generating at least $3.6 billion in sales revenue just for that one model, according to George Pipas, Ford's sales and market analyst. 



 GM posted its best monthly sales in 26 years. And Chrysler said it not only set a record for July, but that its retail sales -- to consumers rather than rental fleets and corporate motor pools -- hit an all-time high. 



 GM liked things so much that on Tuesday it reversed its decision to end its two-month-old employee discount program after Ford and Chrysler said they would extend their plans through Sept. 6. GM will now offer it through the same date as well, but only on 2005 models. Ford is including some 2006 models in its discount pricing. 



 ``It felt pretty good this month, and we didn't want to stop,'' said Pipas. 



 But various observers warned the summer sales pace is likely to begin slowing as the popular plans are withdrawn. 



 ``There will be some payback'' because the incentives pulled many buyers into the market ahead of when they normally would have been shopping, said GM market analyst Paul Ballew. 



 The July boom, agreed Healy, ``was at the expense of sales coming up in late August and September and October.'' 



 Meanwhile, sales for import automakers also picked up. 



 July sales for Toyota increased by 8.1 percent; Honda was up 10.3 percent; Nissan reported a 15 percent sales gain and Hyundai sales rose 10.7 percent. 



 Overall, the domestic ``Big Three,'' excluding their foreign nameplates such as Ford's Jaguar subsidiary, held a combined 60 percent share of the U.S. market in July, up from 58.2 percent a year earlier. Import brands, with a collective 40 percent share, were down from 41.8 percent in July, 2004. 



 Pickup trucks and sport utility vehicles made up the bulk of the July sales increase, accounting for 60.7 percent of passenger vehicle sales industrywide, and for more than 70 percent of the domestic brands' sales. 



 Only three of the 18 automakers doing business in the United States failed to capitalize on the July sales boom. 



 Mitsubishi Motors, which actually saw a slowing decline, reported sales down 7.3 percent for the month after half-a-year of double-digit drops. A near-dormant Isuzu Motors posted a 69 percent decline to just 845 passenger vehicles sold. And a stumbling Volkswagen reported a 12.1 percent dip as a redesigned Jetta failed to offset the flagging fortunes of other models, including the Touareg SUV.