Automakers See May Sales Slump

The auto industry is experiencing the roughest financial period in its history, with the Big Three reporting less-than-favorable sales for May. As General Motors and Chrysler headed to bankruptcy court earlier this week, and with President Barack Obama’s plan to take a 60% stake in GM, the industry has seen major changes that many hope will revive its future.

In their monthly reports, all the major automakers spoke optimistically about economic conditions, and believed that the latest developments would bring a better future.

Ford Motor Co.

Ford  sales fell 24% in May from the same period last year, but sales rose 20% from April as the Michigan-based automaker continues to gain market share from its U.S. competitors, General Motors Co. and Chrysler L.L.C., who are now under bankruptcy protection.

The only major U.S. auto company without bankruptcy woes, Ford sold 161,197 cars and light trucks, with sales of the Ford Fusion rising 9.4%.

“Consideration for our new products is increasing,” said Ken Czubay, vice president of sales and marketing at Ford. “Even as the competitive environment intensifies, Ford’s relentless pursuit of quality, fuel efficiency, smart technology and appealing designs is winning new customers.”

Sales for its Ford, Lincoln, and Mercury brands dropped 24% to 155,954 vehicles in May compared with last year.

General Motors Co.

One day after the Detroit-based automaker filed for Chapter 11 bankruptcy protection in New York, General Motors reported a 30% decrease in May car and light truck sales, compared with last year.

GM sold 191,875 vehicles, with total truck sales at 110,866, a drop of 22%, and car sales at 81,009, down 38% compared with a year ago.

“We were able to record our best monthly sales

result of the year in May as we are seeing more positive signs in housing and consumer confidence in the market,” said Mark LaNevea, a GM vice president. “Those signs, along with more clarity on the new GM, are providing some additional consumer confidence.”

Chevrolet car retail sales were up 28%, and the Silverado, Colorado, HHR, Equinox, Tahoe, and Traverse saw retail sales increases.

Four brands, which will be dropped in a restructuring of the company — Pontiac, Saturn, Saab and Hummer — reported larger sales drops than GM’s overall decrease, with the worst being a 63.5% drop in Saab sales. The company announced Tuesday it sold its Hummer line to a company whose identity has yet to be disclosed.

Chrysler L.L.C.

Chrysler reported sales of 260,407 vehicles in May, a 47% decrease compared with May 2007. This comes after a U.S. bankruptcy court approved the sale of the majority of the automaker’s assets to a new company, Chrysler Group L.L.C. in alliance with Fiat S.p.A.

“Overall our sales were above expectations during this month of transition,” said Chrysler President Jim Press. “The uncertainty that has been surrounding Chrysler for the last few months is coming to an end, and a vibrant, new company is beginning to take shape,” Press added. “One that will better serve our customers and dealers with a broader and more competitive lineup of environmentally friendly, fuel-efficient, high-quality vehicles.”

The Jeep Wrangler had strong upward sales for the fifth month in a row, with May retail sales up 4% year-over-year, and up 8% compared with last month.

Toyota

Toyota reported a sales drop of 40% in May, compared with a year ago, selling 152,583 vehicles.

“We’re encouraged that consumers are beginning to return to showrooms and that the industry continues to show signs of stabilization,” said Don Esmond, a vice president at the company.

The Toyota division reported sales of 135,661 in May, a decrease of 39% from the same period last year, while the Lexus division reported sales of 16,922, a drop of 33.9% from a year ago.

Sales in Japan for Toyota’s new third-generation Prius hybrid have been booming.

Honda

Honda reported a 39% decline in May sales, retailing 98,344 vehicles. Total car sales decreased by 49% to 51,947 and light truck sales saw a drop of 19% to 36,928.

“Staying true to the course of providing fuel- efficient, high-quality, fun-to-drive vehicles will hopefully help see us through to the economic recovery,” said John Mendel executive vice president of sales for American Honda.

The Acura division reported sales of 9,469, a decrease of 34% compared with May 2008. With 3,375 units sold, the TL sedan was the division’s top seller.