The U.S. auto industry passed two dismal milestones in July, as the domestic Big Three market share slips below 50% for the first time ever and the Honda brand passes Chrysler Group in sales for the second time in 12 months.

Japanese rivals Toyota Motor Corp. and Honda Motor Co. Ltd. finished in the top four in sales in the month, driving foreign market share up to 50.7% and leaving the struggling Detroit-based auto makers a mere 49.3% piece of the pie, Ward’s data show.

The two Japanese car companies also finished in the top four in sales in the year-ago period, but Detroit’s Big Three were able to hold onto a combined 53.3% market share.

July 2006 also marked the only other time Honda has topped Chrysler in monthly sales.

While Toyota once again secured the No.2 spot behind General Motors Corp. in July deliveries, Honda stepped up to fourth place behind Ford Motor Co., forcing Chrysler Group into the No.5 position.

U.S. total light-vehicle sales of 1,304,150 units in July lagged 8.8% behind year-ago, based on a daily selling rate of 54,340 units compared with prior year’s 59,584. July 2006 saw 1,450,180 deliveries, with 25 selling days compared with 24 this year.

Year-to-date U.S. sales of 9,520,849 units are running 3.2% behind last year’s 9,837,209, according to Ward’s data.

Related document: Ward’s U.S. Light Vehicle Sales by Brand and Group

The combined impact of an ongoing housing slump and fuel prices at about $3.00 per gallon drove a seasonally adjusted annual rate of 15.49 million in July, falling far short of year-ago’s 17.14 million.

Also worth noting, since May’s 50/50 split between passenger-car and light-truck deliveries, consumer purchases slowly have trended back toward trucks. Passenger cars dropped to 47.6% of sales last month, while light trucks crept upward to 52.4%.

U.S. light-truck sales passed passenger cars for the first time ever in November 1998, when truck deliveries hit 578,532, 2.8% ahead of cars, according to Ward’s data. Light trucks have maintained their lead uninterrupted since June 2002 until the May stalemate.

GM’s overall sales declined 19.0% in July, only a slight improvement from June’s 24.2% nosedive. Deliveries of 315,995 vehicles generated a DSR of 13,166 that paled in comparison with prior-year’s 16,256.

An incentive boost on pickups offered late in the month in response to Toyota’s aggressive spiffs prompted better end-of-the-month sales for GM’s light trucks.

However, it was a case of “too little, too late,” as GM’s pickup deliveries tumbled 28.8% in July. The Chevy Silverado and GMC Sierra, the auto maker’s most popular pickups, saw sales shortfalls of 26.5% and 27.9%, respectively. This, in turn, prompted GM to pare back production at its Pontiac facility.

Trucks were not the only laggards for GM in July, as sales declined in every vehicle segment.

Surprisingly, small cars were hit almost as hard as pickups. Sales in the segment sank 27.1% in July, led by a 54.7% drop in the outgoing Saturn Ion and followed by a 31.1% decline for the Chevy Cobalt.

However, deliveries remained stable for GM’s new trio of 8-seat cross/utility vehicles – the Buick Enclave, Saturn Outlook and GMC Acadia.

Unfortunately, poor sales of the Pontiac Torrent, Saturn Vue and Chevy Equinox, which saw a combined falloff of 40.4%, countered success in the segment to reduce GM’s overall CUV sales 6.1%.

Ford sales fell to 189,764 units in the month, a sharp 16.4% drop from year-ago’s 236,582 deliveries based on a daily selling rate of 7,907 units. The shortfall was seen in retail deliveries as well as daily rental sales, which the auto maker reports were cut another 14,000 units.

Ford plans to trim its daily rental fleet an additional 32,000 units by October to achieve a planned 135,000-unit annual reduction from 2006. Although daily rentals are not a profitable segment, Ford does not want to abandon these sales entirely because they provide an avenue for exposure to its new products.

As with GM, Ford was encouraged by consumers’ response to its new and redesigned products. CUV sales in contrast to GM were up 46.4% in July, compared with an industry average increase of only 6.9% for the segment.

The Ford Escape continued to anchor the group with a 6.5% increase, while Mercury Mariner sales improved slightly more than 6.0%. Ford Edge deliveries were down from June levels but continued to show strength, as did its Lincoln MKX sibling.

Other segments didn’t fare as well. Sales of Ford’s midsize cars tumbled 39.6%, with a disappointing 28.5% drop in Ford Fusion deliveries due to reduced fleet sales, although the Fusion’s retail sales jumped 17.0%.

With the Ford Freestar and Mercury Monterey no longer available, the auto maker’s overall van sales fell 34.3% in year-on-year comparison.

Pickups slid 18.2% from year-ago primarily due to a 17.2% drop in Ford F-Series deliveries and 26.4% fewer Ranger sales.

While SUV sales were down 12.3%, the redesigned fullsize Ford Expedition and Lincoln Navigator showed exceptional improvement over prior-year with increases of 26.9% and 12.9%, respectively.

Chrysler deliveries fell 4.6% to 137,728 vehicles in July, compared with year-ago’s 150,349 units, with a daily selling rate of 5,739.

Both fleet and retail sales were down, but Chrysler reported the lowest fleet total for July in 25 years.

However, Chrysler’s Jeep brand posted an 8.6% year-on-year sales gain for the fifth consecutive month, driven by strong demand for the Wrangler and Compass. The Wrangler also contributed to a 10.3% rise in SUV sales, while the Compass drove a 6.1% increase in CUV deliveries.

Sales of outgoing minivan models declined 40% in July vs. year-ago, but Chrysler is expecting a major increase in deliveries when the redesigned ’08 Dodge Caravan and Chrysler Town & Country launch later this year.

The Dodge Caliber small car was a source of distress, as sales plunged 55.0% from last month and 23.1% from last July.

Toyota, which up to now has seemed impervious to U.S. market volatility, also registered a sales loss in July compared with prior year. Delivery of 224,058 units was off 3.5% compared with year-ago’s 241,826.

In drastic contrast to Detroit auto makers, Toyota’s pickup sales surged a whopping 134.5% ahead of like-2006 thanks to heavy incentives on the newly introduced fullsize Tundra.

On the downside, Toyota’s CUV sales fell 6.1%, blamed on lagging Highlander sales. The brand’s small cars and SUVs also showed declining year-on-year sales.

Although Honda managed to top Chrysler sales, the Japanese auto maker suffered a fallout in July, with unit sales of 141,049 units that were 3.2% behind last year’s 151,804.

The loss was due primarily to declining CUV deliveries, despite a strong showing by the CR-V. However, Honda’s small cars and Ridgeline pickup managed to make gains over prior-year.

The only auto maker in the U.S. top six to show sales improvement over last July was Nissan Motor Co. Ltd., with sales of 87,890 units that exceeded year-ago’s 86,423 by 5.9%. The midsize Altima sedan and Versa small car drove the sales increase.

Germany’s BMW AG recorded the most improvement over year-ago, increasing July sales 25.1% to 28,364 vehicles.