GM?s July sales boosted by Chevy demand

DETROIT?? General Motors Co on Tuesday posted a 7.6 percent sales gain in July on stronger demand for compact vehicles including the Chevrolet Cruze car and Equinox crossover.

GM said U.S. sales rose to 214,915 new cars and light trucks, within the range of analysts' expectations and up from 199,692 vehicles last year.

The rest of the automakers are scheduled to release their U.S. sales results for July later on Tuesday. Thirty-nine economists polled by Reuters were expecting an annual sales rate in July of 11.8 million vehicles.

That pace would still trail the 13 million-plus rate from earlier this year, but many industry executives said it would mark the beginning of a recovery from a bottom in June, when the rate was 11.45 million.

Whatever the number, it is a far cry from the almost 17 million averaged from 2000 to 2007, before the deepest U.S. economic downturn since the Great Depression and the bankruptcies of GM and Chrysler in 2009.

At the start of the year, analysts had forecast a bounce back in 2011 sales to between 13 million and 15 million vehicles.

On Tuesday, GM reiterated its outlook for the low end of the 13 million to 13.5 million range, including about 300,000 in medium and heavy truck sales.

"There remains some uncertainty, but we still believe that the underlying fundamentals are there to get back on track with that slow, steady growth that we saw earlier in the year," GM U.S. sales chief Don Johnson said. "A lot of it clearly is going to hinge on consumer confidence."

Story: US consumer spending unexpectedly fell in June

Monthly car sales figures are among the first snapshots of consumer demand each month. Consumer spending habits are of particular interest after last week's tepid increase in U.S. second-quarter output and sharp downward revision for the first quarter.

The auto industry also is coming off May and June sales that fell short of economists' predictions, raising concerns about the recovery. Analysts said higher pricing by many automakers backfired at a time of penny-pinching by consumers.

GM said sales of cars and crossovers rose 8 percent and 20 percent, respectively, showing a continuing tilt toward vehicles with smaller profit margins than full-size pickup trucks, which fell 3 percent.

Reuters contributed to this report.

Source: http://www.msnbc.msn.com/id/43984324/ns/business-autos/

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