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 Autodata Corp., an industry sales tracking company, pegged the market share controlled by Chrysler Group, Ford Motor Co. and General Motors Corp. at 49.5 percent including foreign nameplates they own such as Saab, Volvo, Land Rover and Jaguar.
Excluding the foreign nameplates, Detroit's market share drops to 48.1 percent, Autodata said.
The market share drop came during a month in which all major automakers but Nissan Motor Co. saw sales declines.
GM sales dropped 22.3 percent when compared to a strong July of 2006, while Ford declined 19.1 percent and Chrysler fell 8.4 percent. Even Toyota Motor Corp., which had been posting strong gains most of the year, reported a decline of 7.4 percent after a record-setting July of last year.
The fact that foreign nameplates now control more than half the U.S. market will mean little to the average consumer, but it likely will damage the psyche of Detroit's automakers, Toprak said.
"It's probably a turning point for people who look at the record books. Domestics on their home turf are being beaten by the foreign automakers in terms of their market share," he said.
But George Pipas, Ford's top sales analyst, said the drop doesn't mean much to anyone since the Detroit Three have been below a 50 percent share of retail sales before. Retail sales do not include sales to rental car companies and fleet buyers.
"I don't think it is particularly significant," Pipas said during a conference call with reporters and industry analysts. "The reason is because there is relatively little fleet content in July, and obviously the Big Three do more fleet business than do the foreign manufacturers."
Erich Merkle, vice president of forecasting for auto consulting company IRN Inc. in Grand Rapids, said the Detroit Three are much more dependent on trucks, which are faltering as housing starts drop. Trucks represent around 30 percent of the vehicle mix for Ford and GM, compared to 5 percent of the mix at Toyota, Merkle said.
"They have their work cut out for them," Merkle said. "The Big Three are going to have to figure out how to be competitive outside of pickup trucks."
Analysts attributed the overall auto market dip in July to high gasoline prices, declining home values, higher payments on adjustable rate mortgages and reluctant consumers.
Toyota sold more vehicles than Ford last month. Its truck sales were flat thanks in part to heavy incentives, but its car sales fell 11.8 percent. Year to date, Ford still held a lead of 11,561 vehicles over Toyota, keeping it No. 2 in the U.S.
GM, still the biggest carmaker in the U.S., said overall sales were down 9.4 percent for the year. Paul Ballew, GM's executive director of global market and industry analysis, said GM's sales were down largely because the company had strong sales in July of last year. But the industry overall saw soft sales on both coasts and in the upper Midwest.
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 Still, GM is not meeting targets set in its restructuring plan.
"This is certainly not the way we wanted to start the summer selling season," Ballew said.
Nissan bucked the trend with sales up 1.7 percent, thanks to the addition of the subcompact Versa and the Altima coupe to its lineup. Nissan sales were up 4.2 percent for the year.
But for most companies, the news was dismal. Ford's U.S. sales were down 12.2 percent for the year. Part of the decline came from cuts in sales to rental car companies, Pipas said. Ford slashed rental sales by 57 percent, or 14,000 vehicles, in July as part of a broader effort to reduce rental sales by 30 percent in 2007.
Ford said one bright spot was sales of crossover vehicles, which were up 40 percent for the month thanks to new entries such as the Ford Edge and Lincoln MKX. GM and Honda also reported brisk sales of crossovers.
Honda Motor Co. said its U.S. sales were down 7 percent for the month, including a 9.7 percent drop in truck sales. Its sales were up 1.7 percent, year to date.
DaimlerChrysler AG said its U.S. sales fell 9.1 percent in July. Chrysler Group said sales were down 8.4 percent for the month, while Mercedes-Benz said U.S. sales fell 13.9 percent from the same month a year ago. The carmaker has fallen 2.3 percent so far this year.
Merkle said with high gas prices and rising rates on adjustable mortgages and home equity loans, consumers simply have less money to buy cars.
"You've got a consumer right now that's really being stretched," Merkle said. "In many cases debt levels are incredibly high to the point where you're seeing a lot of foreclosures."
The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 24 sales days last month and 25 in July 2006.
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On the Net:
DaimlerChrysler AG: http://www.daimlerchrysler.com/
General Motors Corp.: http://www.gm.com/
Ford Motor Co.: http://www.ford.com/
Honda Motor Co.: http://www.honda.com/
Nissan Motor Co.: http://www.nissanusa.com/
Toyota Motor Corp.: http://www.toyota.com/
[Associated Press;
by Tom Krisher]
AP auto writer Dee-Ann Durbin contributed to this report.
Copyright 2007 The Associated Press. All rights reserved. This
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