North America remains at the center of the auto industry’s ongoing revival. In July, for example, automakers sold a total of 1.3 million cars and trucks in the U.S. alone, up 14% from a year earlier. Compare that with Germany, Europe’s biggest economy, which saw just a 2% increase in new-car registrations during the month.

One of the main drivers of the overall sales increase was the continued rise in demand for compact cars. However, pickup truck sales also surged, with Ford Motor Company (NYSE: F), General Motors (NYSE: GM) and Chrysler reporting sales increases of 23%, 44% and 31%, respectively.

“With the economy continuing its slow and steady recovery and low lease opportunities, rock-bottom interest rates and cash rebates all readily available, all signs point to continued solid growth through the second half of the year,” said Alec Gutierrez, an analyst at Kelley Blue Book, which tracks car prices.

Ford Fusion: A Victim of Its Own Success?

The U.S. market leader in July was Toyota Motor Corp. (NYSE: TM), which saw its sales gain 17% during the month, edging out GM, with a 16% increase. Ford trailed with an 11% rise.

However, Ford could have likely narrowed the gap on its Japanese rival if not for an ongoing shortage of some of its most popular vehicles, mainly its Fusion sedan, whose volumes fell 12% during the month, and the Ford Escape SUV, whose sales gained just 3.6%, well below the overall average.

The time it takes to sell a new Fusion currently stands at a fraction of the industry average in many cities. “In some key markets like L.A., San Francisco and Miami, the days to turn is around two weeks, in an industry where it usually takes about two months to move a vehicle,” Ford analyst Erich Merkle said in an August 5 article on theStreet.com.

According to a June 14 Detroit News article, the company has about 39 days of Fusion inventory in stock right now, compared to the 60 days that’s considered a healthy average. Ford plans to address the situation by adding 1,400 workers at its Flat Rock, Michigan, plant, which will start making the car this fall, allowing Ford to up its Fusion output by 100,000 cars a year, or over 8,000 a month.

Right now, the only facility making the Fusion is the Hermosillo Assembly Plant in Mexico, which can turn out about 300,000 of the cars annually.

European Turnaround Would Shift Ford Into Overdrive

As we wrote in April, Ford remains heavily reliant on North America, which ties the company’s prospects to the strength of the ongoing U.S. recovery.

However, Ford’s second quarter earnings, which it reported on July 24, provided optimism that the auto industry’s prospects—along with Ford’s—could be on the upswing in other areas, as well.

The key figure came out of Europe, where auto sales have long been dogged by the sovereign debt crisis and recession. Ford responded by restructuring its business on the continent, including closing two facilities in the U.K. and one in Belgium last year, resulting in 5,700 layoffs. At the same time, it continues to release new models on the continent, including its 2014 EcoSport compact SUV and a redesigned Mondeo mid-sized sedan slated for launch late next year.

These moves appear to be paying off: in the second quarter, the company’s European sales (which amounted to 21% of Ford’s automotive revenue in the period) accelerated to $7.6 billion from $7.1 billion a year ago, and pre-tax losses narrowed to $348 million from $404 million. In all, Ford is expecting a roughly $1.8-billion loss from this division on the year, down from its earlier prediction of $2 billion.

“While the outlook for the business environment in Europe remains uncertain, data trends suggest that economic and industry conditions may have begun to stabilize,” said Ford’s earnings release.

Record Profits in Asia

The company’s other main regions saw gains, too, with the Asia-Pacific-Africa region (8.3% of total revenue) reporting its best-ever quarterly profit, with earnings of $177 million, up from a loss of $66 million a year ago. Sales jumped to $3.0 billion from $2.3 billion.

That’s a reflection of ongoing strength of the region’s car market, particularly in China. “Already the largest automobile market in the world, the country now accounts for nearly a quarter of total annual vehicle production globally,” wrote Investing Daily’s Benjamin Shepherd in a June 4 article in our Global Investment Strategist newsletter.

“As urbanization continues apace in China, automobiles are quickly becoming the favored mode of transportation for those who can afford them,” he added. “Growing distances traveled make bicycles impractical and mass transportation is increasingly crowded and uncomfortable.”

The company has also introduced popular new vehicles in China, including the EcoSport and Kuga SUVs.

Ford’s South American sales (8.3% of total automotive revenue) rose to $3.0 billion from $2.3 billion a year ago, and profits soared from just $5 million to $151 million.

Most of Ford’s automotive revenue (62.2% in the latest quarter) continues to come from North America, and the company continues to benefit as the continent’s car market revs up. In the latest quarter, sales there rose 13.7% from a year ago, to $22.4 billion. Pre-tax profits grew 15.9%, to $2.3 billion.

It all added up to a 14.4% increase in Ford’s overall sales, to $38.1 billion from $33.3 billion a year ago. Without one-time items, including severance payments related to the European plant closures, Ford earned $0.45 a share in the latest quarter, up from $0.30 a year ago and topping the consensus forecast of $0.37. Sales also beat the $34.9 billion that analysts were expecting.

Pickup Leadership Is a Major Asset

As we noted earlier, all three U.S. automakers reported a big jump in truck sales in July, which is the continuation of a trend this year. The segment is hugely important for the Detroit Three because, unlike the rest of the auto industry, they still hold considerable sway, with a combined 93% of the truck market.

Truck sales are benefiting as housing and construction markets recover, putting more cash in contractors’ pockets, which they’re using to replace the old workhorses they’ve been keeping on the road during the slowdown.

Ford is in a great position to capitalize on this trend. As we reported in January, the company’s F-Series led the way in the U.S. in 2012 with 645,316 units sold, about 70,000 ahead of GM’s combined GMC Sierra and Chevrolet Silverado lines. The Dodge Ram trailed with 300,928 units.

The company is now gearing up to release the 2014 model of the F-150, which includes an option to run on compressed natural gas (CNG). Buyers will pay $315 for the CNG package, plus $7,500 to $9,000 more for one of seven of Ford’s CNG partner companies to modify the truck itself.

The CNG-powered F-150 will be able to travel about 750 miles on a tank, depending on size. Greenhouse gas emissions will also be 30% lower, and CNG currently sells for $2.11 per gallon equivalent, as opposed to $3.65 for regular gas.