Aug. 3 (Bloomberg) -- Asian automakers increased their U.S. market share in July, led by Toyota Motor Corp. and Nissan Motor Co., prompting Ford Motor Co. and General Motors Corp. to offer consumers bigger discounts during the month.

Asian companies boosted their share to 35.3 percent in July, a gain of 2.1 points and just 0.1 point below the monthly record, according to Autodata Corp. Ford's sales fell even as it was the biggest spender on incentives in July, offering an average of $4,861 per vehicle. General Motors, the largest carmaker, raised its average incentives to $4,629 per vehicle.

Toyota, Nissan and Honda Motor Co., the three biggest Asian makers of cars and trucks, were able to offer incentives half that of Ford on average after beating their U.S. rivals in quality surveys. Toyota led in a July 29 reliability survey of three-year-old cars and trucks by market research company J.D. Power & Associates, followed by Honda Motor Co.

``Toyota is an unstoppable juggernaut with respect to the brand's perceived reliability and durability,'' said Jim Hossack, an analyst at the Tustin, California-based consulting firm AutoPacific Inc. ``They may not have all the best designs, but they've built up a reputation over the years for absolute quality.''

Toyota's sales rose 18 percent in July, Nissan's gained 36 percent and Honda, fifth in U.S. sales, reported a 1.1 percent increase. General Motors, the world's largest automaker, said sales rose 0.3 percent, while Ford's fell 4.1 percent and DaimlerChrysler AG's Chrysler had a 6.3 percent gain.

Total U.S. sales of new passenger vehicles were 1.56 million for the month, up 2.9 percent from a year ago, according to Autodata.

``The U.S. market is the biggest and most profitable for the Japanese automakers,'' said Masayuki Kubota, a fund manager at Daiwa SB Investments Ltd., who helps manage the equivalent of $8.5 billion in Tokyo. ``Success in the U.S. is key to their overall earnings.''

Incentives

Ford was the biggest spender on incentives for the first time in 10 months, according to CNW Marketing Research in Bandon, Oregon. General Motors and Chrysler spent an average $4,629 per vehicle, Toyota spent $3,377, Nissan $1,877 and Honda Motor Co. spent $2,125.

Japanese and South Korean automakers, including Toyota, Honda, Nissan, Hyundai Motor Co., Kia Motors Corp., Mazda Motor Corp., Fuji Heavy Industries Inc.'s Subaru, Mitsubishi Motors Corp., Suzuki Motor Corp. and Isuzu Motors Ltd., sold 577,570 cars and trucks in July, rising from 554,453 a year earlier.

The 10 companies have added U.S. market share for eight consecutive months and held a record 34.5 percent share of the world's largest auto market this year through July.

Toyota

Toyota, Asia's largest automaker, got a lift in the month from sales of Prius hybrid cars and Sienna minivans. Toyota, which ranks fourth in U.S. sales, sold 200,206 vehicles, up from 169,631 a year earlier.

Sales rose 19 percent to 175,083 for Toyota-brand and Scion models and climbed 12 percent to 25,123 for Lexus luxury vehicles, the company said. The Scion brand, which began operations in all major U.S. markets last month, posted record sales of 14,793 cars, led by the new tC sports coupe.

Toyota's market share rose 1.7 percentage points to 12.9 percent for the month. So far this year Toyota has added 1.1 percentage points of share, the largest gain of any automaker.

``We plan to increase North American production to 1.66 million in 2006 from 1.28 million in 2003, and boost more local output,'' said Toyota Managing Executive Officer Shin Kanada yesterday at a Tokyo press conference. ``There are risks such as oil price and interest rates in the U.S, but we aren't worried too much.''

Toyota shares rose as much as 0.7 percent to 4,400 yen in Wednesday trading in Tokyo. Honda shares rose as much as 0.6 percent to 5,390 yen, while Nissan shares gained as much as 0.5 percent to 1,188 yen on Wednesday.

Honda, Nissan

Honda sold 129,872 cars and trucks last month, an increase from 128,433 a year earlier. Honda division sales rose less than 1 percent to 112,815. Sales of Acura cars and light trucks increased 8.1 percent to 17,057.

Tokyo-based Honda's market share for the month was 8.3 percent, a drop of 0.2 percentage point.

Nissan, aided by higher sales of Titan pickups to 8,726 after it began offering a $1,000 rebate on the model, sold 93,297 vehicles, an increase from 68,602 a year earlier, Jed Connelly, the Tokyo-based company's U.S. senior vice president, said in an e-mail message.

``Incentives for Nissan North America continue to be modest and far below the industry average,'' Connelly said.

Sales rose 40 percent to 80,935 for Nissan-brand vehicles and 14 percent to 12,362 for Infiniti-brand cars and trucks. Nissan's market share increased to 6 percent from 4.5 percent.

Hyundai, Kia, Mazda

Hyundai, South Korea's largest automaker, sold 40,125 vehicles in July, 10 percent more than a year ago. The gain was led by demand for Sonata and Accent cars and Santa Fe sport- utility vehicles. Hyundai's market share rose 0.1 percentage point to 2.6 percent.

Hyundai subsidiary Kia sold 23,637 cars and light trucks, down 1.5 percent from last July. Higher sales of Sedona minivans, Sorento SUVs and Amanti sedans didn't offset declines for most of Seoul-based Kia's car models. The company's market share slipped 0.1 point to 1.5 percent.

Mazda, a third owned by Ford, sold 23,487 vehicles, down 12 percent, the company's first monthly sales decline this year. The decline, arising from slower sales of Mazda6 midsize cars, MPV minivans and Miata roadsters, cut Mazda's market share 0.3 point to 1.5 percent.

Mitsubishi Motors, which last month announced more job cuts at its sole U.S. auto factory, sold just 11,192 vehicles in July, down 51 percent. Sales fell for every model in the Tokyo-based company's U.S. lineup.

Mitsubishi's market share for the month was 0.7 percent, down from 1.5 percent a year ago.

Subaru, Suzuki, Isuzu

Subaru, a fifth owned by General Motors, sold 17,596 all- wheel drive sedans and wagons last month, down 4 percent. The Tokyo-based company's market share slipped 0.1 point to 1.2 percent.

Suzuki, also a fifth owned by General Motors, sold 6,464 cars and SUVs, up 32 percent from a year ago. The gain, as in previous months, came from the Forenza and Verona sedans Suzuki began selling last year. Shizuoka, Japan-based Suzuki had 0.4 percent of the U.S. market in July, up 0.1 point.

Tokyo-based Isuzu sold 2,749 SUVs last month, up 0.1 percent from July 2003. The General Motors' affiliated truckmaker's market share was unchanged at 0.2 percent.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net.

Last Updated: August 3, 2004 21:16 EDT