US car sales tumbled in July, reflecting a deepening downturn in the industry, with tight credit and weak consumer confidence driving General Motors, Ford and Toyota to post double-digit declines.
Nissan bucked the trend with an 8.5% increase on strong car sales, while Honda reported only a 1.6% drop.
July's sales figures cast another shadow over Detroit's struggling car makers as they grapple with brutal competition, the impact of recent credit rating downgrades and a slump in demand for their most profitable products - SUVs and pickup trucks.
All three US car makers have pulled back on leases and tightened consumer credit terms to protect their balance sheets, particularly from the sharp decline in the resale values of trucks and SUVs. Chrysler, which boosted incentives on its vehicles in August, has completely abandoned leases.
The changes on leases, most of which take effect this month, may further pressure sales for car makers, as leases often have been structured to make monthly car payments more affordable. Ford said it expects the tougher credit environment and lease pull-back to weigh on industry sales for months to come.
GM sales plunged 27% and Ford's sales fell 15%, while Toyota's sales slipped 12%. Overall, total US sales, including heavy vehicles, fell to between 12.7 million and 13 million on an annualised basis in July.
The US car market is headed for its worst year in a decade amid high oil prices, weak consumer confidence and tighter credit. Analysts have recently cautioned that the sales decline will likely continue in 2009, with any turnaround for the sector only expected in 2010.
