Auto sales improve from April

Automakers heartened by uptick

Major automakers Tuesday reported sharp declines in May auto sales compared with a year earlier but said sales rebounds from April are sparking optimism that the industry’s downturn might be ending.

“Clearly, we’re starting to see the industry, both globally and in the United States, start to see a turn for the positive,” said Mike DiGiovanni, General Motors Corp.’s lead sales analyst.

GM, which filed for Chapter 11 bankruptcy protection Monday, said its May sales fell 29.6 percent compared with the same month a year earlier. But sales were up 11 percent compared with April.

Ford Motor Co. reported that its U.S. sales of cars and light trucks fell 24 percent in May compared with a year earlier but noted that its sales were up 20 percent over April. Ford said May was its strongest month for sales since July.

Chrysler, which filed for Chapter 11 bankruptcy protection April 30, said May sales fell 47 percent compared with a year earlier but said May was still its best sales month of the year, with sales of its Chrysler, Dodge and Jeep brands showing double-digit percentage increases from the previous month.

GM and Ford reported better results than their two biggest Japanese rivals. Toyota Motor Corp. and Honda Motor Co. reported preliminary year-over-year sales declines of 38.4 percent and 39.2 percent in the U.S., respectively. Like Ford and GM, Toyota also reported an uptick compared with April, notching a 20 percent month-to-month sales gain.

The increase from April was particularly gratifying for GM, which spent the month dealing with a slide into bankruptcy and a controversial plan to cut its dealer ranks drastically. GM executives said sales picked up markedly at the end of the month, even as it became apparent that the company was headed for bankruptcy court.

“This gives us a lot of confidence that some of the negative issues we’ve had to deal with are behind us and haven’t affected our sales,” DiGiovanni said.

GM said supportive comments from President Barack Obama might have helped bolster consumers, who also might have grown somewhat inured to news of corporate disarray over the past several months.

Auto Web site said in a report last week that reports from dealer showrooms indicated that GM and Chrysler’s financial struggles weren’t necessarily scaring away buyers.

“Clearly, media coverage of a potential bankruptcy or liquidation does impact sales, but the stigma of bankruptcy seems to have been vastly overstated,” Edmunds said in its report.

Analysts will be watching to see if that increased traffic translated into higher sales for the overall industry. In April, U.S. light-vehicle sales – which include cars, pickup trucks and sport utility vehicles – were running at an average annualized rate of 9.3 million units. That compared with total sales of 13.2 million in 2008 and 16.1 million in 2007.


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