GM's July US auto sales rise 8%

General Motors' U.S. sales rose eight per cent in July, led by fuel-efficient vehicles such as the Chevrolet Cruze. But the increase may not be the norm.

Analysts predicted only a slight rise in overall sales of new cars and trucks for July. Economic worries and a lack of discounts probably kept many buyers away, causing sales to sputter for the third straight month.

Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, expects U.S. light vehicle sales to rise onlythree per cent over last July, as high unemployment, low consumer confidence and shortages of some Japanese models discourage potential car buyers.

July's numbers are expected to show that auto sales are faltering a bit after weaker sales in May and a lacklustre June. Sales started strong this year, but have slowed as the economy's growth sputtered and Japan's earthquake caused shortages of popular cars built by Honda and Toyota.

"We're still not back on the track of recovery yet," Schuster said. "There's definitely some weakness kind of looming out there right now."

GM, which was among the first automakers to report resultsTuesday, said its sales rose because buyers went for more efficientvehicles. Analysts say even though gas prices have dropped, mostpeople expect them to rise again in the future.

Prices high

The Detroit automaker said it sold 214,915 cars and trucks last month, including nearly 25,000 Cruzes. That could make the compact America's top-selling car for the second month in a row.

Sales of the Chevrolet Equinox and GMC Terrain small crossovers, which also get good gas mileage, rose about 80 per cent.

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 added uncertainty to the economy.

"Uncertainty in our business is always bad for consumers," Johnson said. "We're just glad a solution has been reached."

Car prices remain relatively high, too, for buyers who have become accustomed to big summertime discounts.

Automakers spent an average of $2,418 per vehicle on incentives, down 15 per cent from last July, according to car pricing site TrueCar.com.