Despite decline from '08, auto industry not unhappy with May sales
— -- Despite predictions that bankruptcy talk would kill sales, the auto industry generally was cheered by May sales figures out Tuesday that showed losses are starting to narrow.
Compared with May 2008, however, General Motors and Ford fared far better than Toyota and Honda, and beat the industry average.
Sales overall improved to an annual pace of 9.91 million, giving automakers hope they might still be able to finish the year with sales of more than 10 million cars and trucks. That's a crucial threshold, because several automakers say they can return to profitability if annual sales hit about 10.5 million or better.
While buyers traditionally come out in larger numbers in the spring, the sales figures still bucked the raft of bad news surrounding cars.
Chrysler was in bankruptcy restructuring the whole month. Its sales declined 46.9% from a year ago, but the company said in a statement it was pleased, because sales to individuals improved. The decline was due to a cutoff in sales to rental car and government fleets, it said.
General Motors received widespread coverage of its troubles all month, culminating in Monday's Chapter 11 filing. Its sales fell only 29% compared with last year, a 4-percentage-point improvement over April's figures.
As a result, GM is backtracking from earlier predictions that a bankruptcy filing would doom its business.
"It's becoming clear to the customer we're going to emerge from this," said Mark LaNeve, North American sales chief. "I sense the worst is behind us."
Ford, the only one of Detroit's Big 3 to avoid government loans and bankruptcy restructuring, said its sales performance was strong enough — down just 24.1% — to merit cranking up production modestly.
For Ford dealers, it "was their best month in quite some time," said Ken Czubay, Ford's sales vice president. The midsize Fusion sedan did especially well. But he said Ford expects GM and Chrysler may hold "fire sales" this summer with deep discounts as they downsize dealers.
