DETROIT -- Toyota Motor Corp. Wednesday said its U.S. sales dropped an adjusted 3.5 percent in July as weakness in the U.S. housing market weighed on vehicle sales.

It was the first year-on-year sales decline for Toyota since August 2004, a Toyota spokeswoman said.

The Japanese automaker, which is on track to overtake General Motors Corp. as the world's largest, said it sold 224,058 vehicles in the United States in July.

"The industry stumbled this month, on continued housing weakness," Toyota's North American sales chief Jim Lentz said in a statement.

Toyota-branded car sales fell 10 percent, while truck sales rose 4 percent. The results were adjusted for an extra selling day in July 2006.

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Despite the one-month decline, Toyota has bucked the downturn in the industry this year with a year-to-date sales increase of almost 6 percent.

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