U.S. auto sales dropped 13% in July from the same month last year as sales of trucks and sport-utility vehicles kept falling, and a tight credit market kept customers out of the showrooms while forcing auto makers to back away from leasing vehicles.  Vehicles sales totaled 1,136,176 cars and light trucks, according to Autodata Corp. The seasonally adjusted, annualized sales pace was 12.55 million vehicles, much lower than expected and a worrying sign for an already embattled auto industry. The year-earlier level was 15.48 million vehicles.  Sales are on a pace not seen since the recessionary period of the early 1990s. Sales of about 16 million vehicles in a year are considered healthy.  The downtrend again hit a wide swath of auto makers, with the Big Three taking the brunt of it. General Motors Corp., on the day it posted a $15.5 billion quarterly loss, reported that its sales of cars and light trucks declined 26% to 231,314.  Ford Motor Co.'s sales dropped 13% to 155,866, likely the company's worst July since the early 1980s, according to company sales analyst George Pipas. Chrysler LLC reported a 28.8% drop to 98,109.  In another weak month for a once strong performer, sales at Toyota Motor Corp. fell 11.9% to 197,424 vehicles.  Honda Motor Co. has bucked the market's trend in recent months, thanks to the popularity of its small cars such as the Civic and the Fit. But sales fell 1.6% to 138,744, surprising analysts. Sales of Honda passenger cars rose 14%, although truck sales plummeted 22%. Nissan Motor Co. claimed one of the few bright spots in the market, with an 8.5% gain in July U.S. sales to 95,319, a figure observers attributed to large incentives for consumers.  Auto makers again reiterated that they could have sold more vehicles in July but lacked enough of the models that customers wanted. GM officials forecast that vehicle shortages might cost the industry as much as 300,000 units in lost sales this year. Sales of crossover vehicles -- a segment hurt by the dropping residual values of trucks and sport-utility vehicles -- also fell. GM's total truck sales tumbled 35%.  The auto makers continue to rely on incentives to unload bulging inventories of trucks and SUVs on its dealer lots. Ford's Jim Farley, global vice president for marketing and communications, said the auto maker will ratchet up truck incentives in August, and GM officials said they would revive incentives that had expired at the end of July.  Ford is pursuing its leasing customers, enticing them with new deals designed to persuade them to buy their next vehicle. Chrysler is extending discounted six-year financing to more products.  "There is more incentive money in the marketplace. That's for certain," said Mark LaNeve, GM's sales chief.  Customers such as Tracy Stone, a 35-year-old from Fremont, Neb., are taking advantage of those deals. He bought a GMC Sierra truck in early July because the discounts were too good to resist. The sticker price was $20,000; Mr. Stone, who manages his own machine-parts business, bought the vehicle for $14,000. "It's a disposable truck," he said. "Four years and you can throw it away, seriously."  Mr. Farley said trouble in auto sales would be further complicated by a constricting credit market, which had forced auto makers to reduce leasing availability. GM officials played down those concerns. "I think the tightening has already taken place. I don't see it getting worse," Mr. LaNeve said.  Weak truck and SUV sales recently led Ford to push back the launch of its redesigned F-150 pickup truck that once was expected to drive its recovery.  Overall, July sales were pushed down by a weak economy, tightening credit and a soft housing market, all factors likely to hurt auto sales in the months ahead, too.  At the same time, auto makers are seeing a shift that was further underscored in July: American consumers long enamored with trucks and SUVs are now looking for fuel-efficient cars. Sales of Ford's SUVs fell 54%, and its formerly top-selling F-series truck line dropped 20%.  Detroit's Big Three are scrambling to change their production lines by closing truck factories and adding shifts to small-car factories. Their Asian rivals have fared better thanks to more-robust supplies of cars and deeper pockets to withstand a stagnant U.S. economy.  Bob Carter, who heads Toyota-brand sales and marketing in the U.S., described the demand for four cylinder vehicles as "sky high." The company is planning to increase production of its Corolla and Yaris passenger cars by 40,000 units by October to help meet consumer demand for those fuel-efficient cars.  Write to Matthew Dolan at matthew.dolan@wsj.com
Auto makers posted double-digit declines in U.S. auto sales in July, kicking off the second half of a dismal year. GM and Chrysler boosted incentives to help dealers clear more inventory.