- Fla. man charged with killing 16-month-old son to play Xbox undisturbed
- Drones from the deep: Pentagon develops ocean-floor attack robots
- Michigan mayor slaps back atheists’ try to erect ‘reason station’ at city hall
- PHILLIPS: Where is the conservative establishment?
- 7.5-magnitude earthquake shakes southern Mexico
- ISTOOK: IRS “wants to throw us in jail,” says tea party leader
- Easter woes: Chocolate costs soar, becoming ‘unaffordable’ luxury
- Michaels craft chain confirms hackers hit 3M customers
- Special Forces’ suicide rates hit record levels — casualties of ‘hard combat’
- Many Americans would quickly face financial hardship after losing job, poll shows
Weak July concerns auto industry
DETROIT — Car buyers kept visiting dealerships in July, but not in big enough numbers to shake the auto industry's unease about its recovery.
Analysts predicted only a slight rise in U.S. sales of new cars and trucks for July. A lack of discounts and continuing shortages of Japanese cars kept many buyers away, causing sales to sputter for the third straight month. Americans also worried about the weakening economy.
"We're still not back on the track of recovery yet," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "There's definitely some weakness kind of looming out there."
Sales started strong this year, but have slowed as the economy's growth faltered and Japan's earthquake caused shortages of popular models sold by Honda and Toyota. The unemployment rate rose to 9.2 percent earlier this summer, the highest level this year, and consumer confidence is shaky.
But July wasn't a total loss. Sales of compact cars and newer, more fuel-efficient SUVs rose.
Trucks sales were down, however, hurt by continuing weakness in construction.
Chrysler Group LLC said its sales rose 20 percent over last July. It was helped by new products such as the Jeep Grand Cherokee, which saw sales jump 76 percent.
Sales rose 8 percent at General Motors, led by fuel-efficient vehicles such as the Chevrolet Cruze, which can get 30 mpg in combined city-highway driving. Analysts say even though gas prices have dropped, most people expect them to rise again. Sales rose sharply for the Chevrolet Equinox and GMC Terrain small crossovers, which also get good gas mileage.
GM Vice President of Sales Don Johnson said many customers decided to hold off buying cars last month because wrangling over raising the government's debt ceiling made buyers nervous.
"Uncertainty, in our business, is always bad for consumers," Mr. Johnson said.
Ford Motor Co. said sales rose 6 percent. The new Ford Explorer was a strong performer, with sales more than double a year ago. One of the company's small cars did well, too. The Fiesta saw sales rise 58 percent. But in disappointment for the company, the popular Focus couldn't capitalize on strong small-car sales, because problems at a factory limited production.
Buyers, who are accustomed to summertime discounts, are also concerned about high prices. Mr. Schuster said a standoff could be brewing between people waiting for deals and automakers that are reluctant to give them. Carmakers are keeping prices high because of rising steel costs and lingering shortages of some vehicles and parts.
Automakers spent an average of $2,418 per vehicle on incentives, down 15 percent from last July, according to car pricing site TrueCar.com.
Mr. Johnson predicted that discounts would rise in the second half. Japanese cars are re-entering the market as their factories come back on line. That could boost industry sales because many people are waiting for those cars. Also, sales could get a lift from people who are driving older cars and finally need to replace them.
"The underlying fundamentals are there to get back on track with that slow, steady growth that we saw earlier in the year," Mr. Johnson said.
TWT Video Picks
- Harry Reid blasts Bundy ranch supporters as 'domestic terrorists'
- Immigration still on hold: Boehner's office
- Inside China: Marine's comment on islands draws sharp Chinese response
- Supreme Court weighs appeal to concealed-carry gun laws
- Nancy Pelosi washes immigrants' feet in humble Holy Week act then promotes on Twitter
- PRUDEN: When a bored president just 'mails it in'
- Army goes to war with National Guard, seizes Apache attack helicopters
- BRUCE: Obama deliberately emboldening America's enemies
- Joe Biden's biggest gaffe: VP blowing his 2016 head start
- Jews being told to register in Ukraine: John Kerry
Top 10 handguns in the U.S.