General Motors Corp. sales sink 31.8% in July, as the auto maker continues to feel pain from a slumping economy, high gasoline prices and a shortage of the small cars consumers currently demand.

GM dealers delivered 233,412 units last month, which compares with 315,995 in like-2007, according to Ward’s data. There were 26 selling days last month vs. 24 year-ago. Industry-wide, the seasonally adjusted annual rate dipped below 13 million for the first time since August 1992, GM estimates.

“This was a very challenging month, obviously, for the industry,” says Mike DiGiovanni, GM executive director-global market analysis. “Basically, we’re in a period that feels a lot like 1991, 1992, when we had similar issues with a recession, higher oil prices and some housing issues.”

Although manufacturing output continues to fall, unemployment numbers are rising and new home sales and prices remain stagnant, DiGiovanni says, GM takes cold comfort in oil prices that appear to be stabilizing in the $130 to $140 range. Record oil prices this year pushed average pump prices over $4 per gallon, and day-to-day fuel-price volatility has kept fearful car buyers on the sidelines.

“Oil prices have retreated 15% from the high of $147 a barrel they reached on July 11,” DiGiovanni says. “And this is probably the most important thing, because high oil prices were the tipping point that really pushed the economy over the edge, when combined with the housing issues.

“The most important thing is stability in oil prices, which we are beginning to see,” he says, reiterating GM’s expectations for an uptick in economic activity sometime after first-quarter 2009, when the auto maker believes the housing market will begin its rebound.

In July, however, consumers who did enter the market again were looking for fuel-efficient cars, and GM’s deliveries in the month reflected the trend.

Sales of the Chevy Aveo subcompact gained 7.9% in the month and deliveries of the redesigned-for-’08 Chevy Malibu midsize car grew 64.8%.

Demand for the Saturn Aura, which shares the Malibu’s Epsilon platform, increased 14.1% on the strength of a newly available 4-cyl. engine.

Sales of the Chevrolet Cobalt fell 4.4%, although the fuel-sipping compact faced unfavorable year-over-year comparisons due to a liquidation event in like-2007. So far this year, Cobalt sales are up 16.4%, Ward’s data shows.

Mark LaNeve, vice president sales, service and marketing at GM, says the auto maker would have sold more cars in the month if its inventories would have allowed. GM does not expect to meet demand for smaller cars until later this year after additional shifts and overtime at key assembly plants begins.

“It affected our business to some extent,” LaNeve says of GM’s inventory mix

GM’s inventories at the end of July stood at 747,000 cars and trucks, down 235,184 units, or 26.7%, vs. like-2007. Trucks account for 55% of the mix, cars 32% and cross/utility vehicles 13%, GM says. The auto maker hopes to take about 300,000 units of truck production out of its build slate this year.

“We’re still a little heavy on trucks, (but) a bit better than it was,” LaNeve says. “(We’re) still a little bit light on cars and crossovers, which doesn’t bother me because it’s one reason we can hold price.”

Also reflecting recent market trends, GM truck sales plummeted in the month. Down considerably were the Chevrolet Silverado fullsize pickup (35.2%), Tahoe fullsize SUV (40%) and TrailBlazer midsize SUV (74.9%). Sales of GM’s midsize CUVs were uneven, with the Buick Enclave gaining 18%, GMC Acadia falling 12.5% and Saturn Outlook slipping 34.6%.

LaNeve also reiterates the auto maker’s commitment to its leasing program, although with adjustments, as plummeting residual values on trucks and tighter lending standards have led to financial losses at GM, Chrysler LLC, Ford Motor Co. and some foreign manufacturers.

“We’re going to stay in leasing at fairly competitive levels and in a number of key segments like mid cars and premium cars,” he says, adding that the industry pullback in leasing could affect sales volumes going forward.

“(It) could have a serious effect, or relatively minor (one), but certainly (it’s) a move we have to make to deal with the risk in the market place in terms of residual values. And if the industry can see its way through this, it will give is a higher quality of sales and much higher profit per vehicle.”