GM, Ford, Toyota July U.S. sales drop, Nissan's up

By Poornima Gupta

DETROIT (Reuters) - U.S. auto sales tumbled in July, reflecting a deepening downturn in the industry, with tight credit and weak consumer confidence driving General Motors Corp GM.N, Ford Motor Co (F.N) and Toyota Motor Corp (7203.T) to post double-digit declines.

Nissan Motor Co Ltd (7201.T) bucked the trend with an 8.5 percent increase on strong car sales, while Honda Motor Co Ltd (7267.T) reported only a 1.6 percent drop.

July sales cast another shadow over Detroit's struggling automakers as they grapple with brutal competition, the impact of recent credit rating downgrades and a slump in demand for their most profitable products -- SUVs and pickup trucks.

GM's weak showing came as the No. 1 U.S. automaker posted a $15.5 billion quarterly loss, with plummeting sales and prices for SUVs forcing deep charges for its auto finance business.

All three U.S. automakers have pulled back on auto leases and tightened consumer credit terms to protect their balance sheets, particularly from the sharp decline in the resale values of trucks and SUVs.

Chrysler LLC, which boosted incentives on its vehicles in August, has completely abandoned leases.

The changes on leases, most of which take effect this month, may further pressure sales for automakers, as leases often have been structured to make monthly car payments more affordable.

Ford said it expects the tougher credit environment and lease pull-back to weigh on industry sales for months to come.