Major automakers today reported sharp declines in May auto sales compared with a year earlier but said sales rebounds from April were sparking optimism that the industry's long downturn might be ending.
"Clearly, we're starting to see the industry, both globally and in the Untied States, start to see a turn for the positive," said Mike DiGiovanni, General Motors Corp.'s lead sales analyst. "We think we're starting to emerge from this global downturn."
Industrywide, sales of cars, pickup trucks and sport utility vehicles in the U.S. plummeted almost 34% compared with May 2008, according to Autodata Corp. It was the 17th consecutive year-over-year decline in monthly sales, although sales were up almost 13% compared with April.
GM, which filed for Chapter 11 bankruptcy protection Monday, saw its May sales fall almost 29% compared with the same month a year earlier, according to Autodata. But sales were up 11% compared with April.
Ford Motor Co. reported that its U.S. sales of cars and light trucks fell 24% in May compared with the year-ago period, but noted that its sales were up 20% over April. Ford said May was its strongest month for sales since last July.
Chrysler, which filed for Chapter 11 bankruptcy protection on April 30, said May sales fell 47% 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 year-over-year sales declines of 41% and 42% in the U.S., respectively, according to Autodata. Like Ford and GM, Toyota also reported an uptick compared with April, notching a 20% month-to-month sales gain. But Honda's sales fell almost 3% compared with April.
Nissan had the best performance for the Big Three Japanese automakers, reporting a 33% decline in U.S. sales last month. It also notched an impressive 43% jump in sales from April.
The increase from April was particularly gratifying for GM, which spent the month dealing with a well-publicized slide into bankruptcy and a controversial plan to drastically cut its dealer ranks. 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 Obama may have helped bolster consumers, who also may have grown somewhat inured to news of corporate disarray over the last several months.
Auto website Edmunds.com 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 today 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.
Ford sales analysts estimated that May sales for the industry might come in at a 10 million-vehicle annual rate, although they cautioned that the next three months would probably be volatile as GM and Chrysler worked their way through bankruptcy and the economy struggled to find firm footing.
"It's still a very fragile industry," said Ken Czubay, Ford's vice president of sales and marketing. "This isn't any time to rejoice. It's just a slight uptick."
Analysts were cautiously encouraged by Ford's report.
"Some news, such as year-over-year improvement at Lincoln, and increased quarterly production plans and lower inventory, appear to us to be more than just press-release hype," Efraim Levy, auto analyst with Standard & Poor's Equity Research, wrote in a research note. "Still, we see economic risks, as well as industry-specific risks, from weak suppliers."
Ford said sales of its new Ford Fusion and Mercury Milan hybrids helped boost its monthly performance, as did strong sales of its redesigned 2010 Ford Mustang. GM said its new Chevrolet Camaro also was selling as fast as it could be delivered to dealers.
U.S. auto sales have plummeted as the credit crisis and the worst recession since the 1930s have kept consumers out of dealer showrooms. The Detroit automakers have been hard particularly hit, and steep drops in sales helped push Chrysler and GM into bankruptcy court.
Edmunds.com projected last week that May auto sales would be down 36.1% industrywide compared with the same month a year earlier. But the firm expected sales to show a 9% increase over April.
"Consumer confidence, a key factor in car buying, rose in May by the most in six years and is now at a level not seen since last September," Michelle Krebs, senior editor at AutoObserver.com, said in a report last week. "This good news couldn't come soon enough for the auto industry, and the benefits are already coming in for most automakers."
The current stock market rally, which has seen the Dow Jones industrial average jump 33% since early March, also is helping car sales, analysts said, although there has been some concern that the rapid rise in gasoline prices since the start of the year could dampen car buyers' enthusiasm.
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