US auto sales declines show signs of leveling off

U.S. sales at Ford and Chrysler last month offered sharply different views on the downtrodden U.S. market for cars and trucks, while General Motors Corp. held its own even though it entered bankruptcy protection.

Ford's June sales showed signs of stabilization, as the healthiest Detroit automaker posted its smallest sales decline of the year at 10.7 percent. It also said it gained market share. But Chrysler Group LLC, just weeks after exiting bankruptcy protection, reported a 42 percent drop in sales, hurt by a big cut in fleet sales and declines in all its models except the Dodge Challenger muscle car.

GM reported a 33.4 percent sales drop, slightly larger than the 30 percent drop it reported for May before it entered bankruptcy protection. GM plans to sell or close Pontiac, Saturn, Hummer and Saab to focus on four core brands -- Chevrolet, Cadillac, GMC and Buick.

June sales from other automakers indicated that the industry downturn has begun leveling off. Toyota's U.S. sales fell 32 percent in June to 131,654 units -- a smaller decline than in previous months for the Japanese automaker.

Economists say there are signs that the economy is recovering, with housing starts rising more than expected in May and wholesale prices remaining in check. But the Conference Board reported Wednesday that consumer confidence fell unexpectedly in June.

"We're making steady progress," Jim Farley, the company's group vice president of marketing, said in a statement. "We remain grounded, however, given challenging industry and economic conditions."

Analysts predict that June sales, adjusted for seasonal variances and multiplied to determine an annual rate, will top the 10 million mark for the first time this year. During several months earlier in 2009, U.S. car and truck sales dropped to a rate of about 9 million vehicles, a huge reduction from more than 16 million as recently as 2007.

But any jump in the annual rate could be fueled by fire-sale prices at 789 Chrysler dealers that were fired by the company during the bankruptcy process and told to get rid of their inventory by June 9. Also, with GM dropping its Pontiac brand, incentives will rise on those models.

Toyota's top-selling Camry midsize sedan saw sales fall 37 percent while Corolla compact sales plunged 53 percent.

One bright spot for Toyota was its recently released third-generation Prius, which saw sales rise 10 percent. Prius sales had suffered in recent months as gas prices plunged from more than $4 per gallon last summer to below $2 a gallon in the winter.

Nissan Motor Co., the No. 3 Japanese automaker, also enjoyed a better month. Its sales fell 23 percent to 48,298 in June on sales declines of its top-selling Altima sedan. The automaker sold 2,137 units of its boxy Nissan Cube in its first month of sales, while sales of its 350/370Z roadster climbed 11 percent.

Dearborn, Mich.-based Ford Motor Co. has seen its market share grow while rivals Chrysler Group LLC, which emerged from bankruptcy protection on June 10, and General Motors Corp. struggle.

The monthly decline was Ford's smallest since July of last year, a sign of life amid the worst slump in 27 years. Ford sold 154,873 cars and light trucks last month, with strength in its midsize Fusion and the Flex crossover vehicle.

Chrysler said it sold only 68,297 vehicles last month, despite fire-sale prices at 789 dealerships that the company terminated.

Ford's surprisingly low decline came after a string of months in which it and other automakers reported year-over-year drops of more than 40 percent. Ford's sales were down 24 percent in May and off 37 percent for the first five months of the year.

"The important takeaway is that we're not going backward, we're not slipping back," Ford's top sales analyst, George Pipas, said Monday.

Ford is the sole U.S. automaker to avoid bankruptcy protection and it's the only one not receiving government loans to keep from running out of money. GM and Chrysler are receiving billions in loans, and GM inching its way closer to escaping Chapter 11.

In anticipation of increased traffic at dealers and higher sales later in the year, Ford announced Monday that it would boost its third-quarter production by 25,000 vehicles.