U.S. Auto Sales May Have Revved Up in July

Automakers are expected to report renewed vigor in vehicle sales Tuesday when they disclose July figures. After disappointing results in June, which were up year-over-year but lower than May in many instances, manufacturers saw increased traffic in showrooms last month as consumers swooped in to snatch up end-of-the-model-year savings.

Expectations are that sales rose to the highest levels of the year last month, reaching an annualized sales rate of 11.9 million units, according to a median estimate of analysts polled by Bloomberg. July is on track to be the best sales month since August 2009, when carmakers cleaned up, thanks to the government's short-lived "cash for clunkers" program.

Eager to make room for 2011 models on dealers' lots, automakers have revved up incentives, offering discounts on average that are 3.8% higher than last year, Bloomberg News reported, citing data from TrueCar.com, an auto-pricing website. Gains in sales are steady but not stellar, analysts say.

"This is fueled by consumers who had postponed their purchases and are now getting back into the market," Jesse Toprak, vice president of industry trends at TrueCar, told the news agency. "They're not coming back in a flood -- they're just trickling in."

Nissan Could Be the Sales Growth Leader

Demand in July is expected to have been higher than even March, when Toyota Motor (TM) began an aggressive incentives campaign to spur sales following massive safety recalls of its cars and trucks. Of the nation's six-largest suppliers of vehicles, however, the Japanese automaker is the only one expected to report a sales decline for the month. Analysts forecast that the rest -- Ford Motor (F), General Motors, Honda Motor (HMC), Nissan Motors (NSANY) and Chrysler Group -- will report increases.

Analysts expect Nissan to best them all, with a 22% increase in sales, followed by Ford with a 13% rise. The remainder are likely to report single-digit percentage increases for the month. Overall, industry sales are expected to have risen 8.4%, compared to the same month a year ago, according to car-buying website Edmunds.com.

Sales are being driven in part by consumers' perceptions that summer is good time to find a bargain, Edmunds analyst Jessica Caldwell told Dow Jones Newswires. But a report issued last week by researcher J.D. Power & Associates showed that deals weren't as generous as they have been in the past.