Announcements of highly improved second quarter earnings by both Ford and GM will not be able to offset continued poor sales of new cars in July.

Industry analysts are expecting the adjusted annual sales rate to total approximately 16.1 million units. That's up from 15.6 million in June but still under the July 2006 figure of 17.1 million.

The figures for June were the lowest reported sales for the industry in 20 months with GM taking the biggest hit, showing a sales drop of 21.3 percent.

Both GM and Ford insist that their falling sales numbers can be attributed to the decision to move away from rental car sales to more lucrative consumer sales.

Predictions for July sales indicate GM posting a decline of 18 percent, Ford 8 percent, and Chrysler 4 percent for the 24 days of selling during the month.

In spite of what appears to be glum July predictions, however, investors in GM and Ford cannot help but be buoyed by the companies' second quarter earnings.

Overall, however, the picture for the Detroit auto giants remains clouded at best. The improvements in earnings are built on the back of internal restructuring programs that have led to job losses and plant shutdowns.

Ford is planning to sell its Land Rover and Jaguar sections and may be shopping for a buyer for Volvo as well.

Most analysts agree that the true future of the major American carmakers rests on talks now in progress with the United Auto Workers union that could relieve the corporations of staggering health care obligations to retirees if an agreement can be reached.