SANTA MONICA, Calif. -

Though projected to improve year-over-year, used sales for July are likely to be softer than where they were a month ago, according to TrueCar. The company suggested Thursday that the second half of 2011 could be rather challenging for the overall car market.

More specifically, TrueCar is forecasting 4.05 million used sales for July, which represents a 2.3-percent year-over-year hike and a 1.8-percent decline compared to June. The firm predicts a 1:4 new-to-used sales ratio for the month.

On the new side of the market, sales are projected at 1.04 million vehicles, a 0.8-percent year-over-year decline and a 0.9-percent sequential drop-off.

The resulting seasonally adjusted annualized rate for new sales would be 11.4 million units, compared to 11.6 million a year ago and 11.5 million last month.

"Economic uncertainty continues along with the debt ceiling crisis which could have an impact on auto sales through the rest of the year if an agreement isn’t announced,” explained Jesse Toprak, TrueCar’s vice president of industry trends and insights.

“With auto sales already not running at a strong rate this summer, it could be a tough second half of the year for the auto industry,” he added.

Breaking it down further, TrueCar anticipates a 2.4-percent year-over-year decline for retail new-vehicle sales in July. These are likely to dip 0.4 percent month-over-month. As far as the fleet and rental side of the market, analysts believe it will reach 17-percent penetration for the month.

Sharing its new-car sales projections for the top seven automakers, Toyota is expected to have the heaviest year-over-year decline (33.3 percent) with projected sales of 112,824 units. This would be a 1.7-percent improvement from June, though.

Honda is also predicted to see a significant softening from a year ago (down 24.6 percent) as its sales are expected at 84,739 units for the month. Again, however, a 1-percent gain from June is likely for the automaker.

The only other top-seven OEM expected to show a year-over-year dip is Nissan (down 6.8 percent). TrueCar believes it will post 76,726 sales, a 6.7-percent improvement from June.

Meanwhile, Hyundai/Kia (up 21.3 percent) is projected to enjoy the biggest increase from a year ago. Its sales are forecasted at 108,702 units, which also marks a 4.2-percent gain from June.

Ford (up 10.5 percent with 183,360 sales), General Motors (up 6.7 percent with 212,661 sales) and Chrysler (up 16.5 percent with 108,702 sales) are all expected to climb from July 2010, as well.

Interestingly enough, though, TrueCar predicts all Big 3 automakers will soften month-over-month, with Chrysler down 8.3 percent, Ford down 5.2 percent and GM down 1.2 percent.

As previously illustrated, the Asian OEMs are forecasted to improve on a month-over-month basis.

Moving along, TrueCar also offered some details on market share for the seven OEMs.

GM, again, is expected to command the largest share at 20.4 percent, followed by Ford at 17.6 percent. Both of these automakers held those respective spots a month ago.

But Toyota, however, is likely to take the No. 3 spot (10.8 percent) after placing fourth last month.

Chrysler (10.4 percent) — which was third in June — appears to be headed for the No. 4 slot, a ranking it is expected to share with Hyundai/Kia, which was fifth last month.

The Nos. 6 and 7 spots are expected to remain the same from a month ago, with Honda projected to command an 8.1-percent share and Nissan forecasted at 7.4 percent.

Incentive Spending

Next up, TrueCar delved into its incentives analysis.

Overall, the industry’s spending level doesn’t appear to have changed much from June, with TrueCar forecasting July’s per-unit spending at $2,418, a 0.7-percent sequential increase. This would mark a 15.1-percent drop from a year ago.

That said, car companies may find it necessary to ramp up incentives.

“Incentives remained relatively flat compared to last month, but as inventories continue to build, automakers will need to increase incentive spending for the rest of the year to help spur some demand,” stated TrueCar automotive analyst Kristen Andersson.

Looking at the seven major OEMs — all of which were projected to have increased spending sequentially — Nissan’s increase from June (8.9 percent) is expected to be the greatest, while Chrysler’s (up 2.2 percent) is likely to be the most modest.

Conversely, all seven were expected to drop on a year-over-year basis, with Hyundai/Kia (down 28.4 percent) showing the largest dip. Respective incentive spending levels for Chrysler, Ford, GM, Honda and Nissan are each likely to be down double-digits, as well, while Toyota is expected to drop 4 percent.

The highest per-unit incentive spending is projected to be at Chrysler ($3,126), with GM next at $3,026.

TrueCar also provided the following charts of its sales and incentives projections: