What's more, falling home prices and a slowdown in refinancing and home-equity lending dampened overall consumer appetite for car shopping, even though consumer confidence in June was at a six-year high, according to a report Tuesday from the Conference Board.
"If I feel good about the economy, I may go out and buy a new DVD player," Toprak said. "But I may not feel good enough to go out and buy a $40,000 truck."
High gasoline prices are also hurting automakers, depressing sales of gas-hungry pickups and sport utility vehicles, which the U.S. companies rely on for the bulk of their sales.
In addition, Ford and GM have been intentionally cutting back on low-profit sales to corporate and rental fleets. Ford said sales to rental companies were down 57% in July, although it noted that sales to retail customers were down 17%.
Ford, which suffered an overall sales decline of 20% according to AutoData, was displaced by Toyota Motor Corp. as No. 2 in U.S. sales. That has happened five times in recent months, but Toprak said Toyota might have now permanently surpassed Ford. Like GM and Chrysler, Ford is closing plants and cutting production in an effort to regain financial stability.
The sales report came just after Ford and GM reported surprisingly strong financial results for the second quarter, which ended June 30. Perhaps with the July numbers in mind, both automakers warned that the second half of the year would be challenging.
Consumers may benefit from the automakers' summer swoon, which could lead to higher incentives on 2007 models from now through October, Toprak said. "We should be seeing a buyers' market."
For Detroit, the loss of top billing in July was a fall from a lofty perch. Fifty years ago, U.S. companies made almost every car sold in America.
In 1955, with Japan and Germany still rebuilding their war-ravaged economies, the U.S. companies' vision of automotive excellence -- tail fins and powerful V-8 engines -- ruled the marketplace.
That dominance faded as imports such as the Volkswagen Beetle became a familiar sight on U.S. streets. The shift accelerated in the 1970s, when the first round of oil price shocks suddenly made Japanese cars, with their edge in quality and economy, smart buys for many Americans who previously wouldn't have considered an import.
