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Car sales in US fall 1.2 percent

US auto sales fell 1.2 percent in May, the eighth decline in a row, beating analysts' forecasts as General Motors Corp's truck sales rose because of discounts and Toyota Motor Corp set a record for the month.

Ford Motor Co's sales of North American-built light vehicles fell 12 percent from the year-earlier month and DaimlerChrysler AG's fell 8.3 percent. Sales rose 9.7 percent at Toyota, the fourth-largest automaker in the US, as all major overseas-based makers except Nissan Motor Co gained.

US consumers bought 1.61 million new cars and trucks, surprising analysts who had forecast a 5.2 percent decline. May's annual selling rate slipped to 16.6 million vehicles from 17.2 million, Autodata Corp said. Still, analysts pointed to General Motors's results and strength among Asian makers as a sign of rebounding confidence in the economy.

"Japanese share is increasing, consumer confidence has bottomed out and is starting to increase again, and people are looking for whatever they can find that is a new product," said Art Spinella, an analyst with CNW Marketing Research.

Consumer confidence rose in May to 115.5 from 109.9 in April, showing growing optimism about how the economy will perform in the next six months. The index uses 1985 as a base of 100.

Unemployment fell one-tenth of a percent in May to 4.4 percent, the Labor Department said today.

General Motors, Ford and DaimlerChrysler's Chrysler division lost 3.2 percentage points of market share, capturing 63 percent of May sales. Ford took the hardest hit, with its share falling 2.3 points to 23.2 percent.

Asian nameplates gained 2.5 points for a 30.4 percent share.

European brands captured 6.6 percent of the market, a gain of 0.7 points, helped by a 4 percent sales increase at Volkswagen AG.

General Motors beat the average forecast of a 6 percent decline with its first sales increase since October. The largest automaker had its best month ever for trucks, a 9.9 percent increase spurred by midmonth US$1,000 discounts on full-size trucks including the Tahoe and Yukon sport-utility vehicles.

"It's striking the immediate response they got for incentives," said Gordon Wangers, president of Automotive Marketing Consultants in Vista, California. "Bully for them." Ford was hurt by the eighth straight decline for the Explorer sport-utility, while Jeep sales declined at DaimlerChrysler's Chrysler unit.

Shares of GM rose US$1.64 to US$58.54 on Friday.

Dearborn, Michigan-based Ford rose US$0.24 to US$24.59, while DaimlerChrysler's US shares declined US$0.32 to US$45.72.

General Motors' total sales including imports and medium-duty trucks rose 0.6 to 459,050 vehicles. The increase for trucks offset an 8.6 percent decline for cars. The company sold 449,726 North American-built cars, pickups, minivans and sport utilities.

Spurred in part discounts, Tahoe sales rose 46 percent, the Yukon gained 35 percent and the Yukon XL rose 52 percent.

"Affordability is certainly helping demand," said Paul Ballew, the automaker's chief market analyst. "We are holding our own in a very competitive industry." Sales rose at the Chevrolet, GMC, Saturn and Hummer divisions, while sales at Cadillac, Oldsmobile, Buick, Pontiac and Saab fell. Every Cadillac and Oldsmobile model declined.

Saturn sales rose 26 percent, including an increase of 31 percent for its L-series. Sales of the Chevrolet Malibu rose 19 percent while the Pontiac Bonneville fell 45 percent.

Ford's total sales including imports and heavy trucks declined 11 percent to 372,798 from the year-earlier month while North American light-vehicle sales were 353,274, in line with estimates.

Sales fell 12 percent for cars and 9.4 percent for trucks, including a 17 percent decline for the Explorer.

Demand for the best-selling sport-utility has slid this year amid a government inquiry into tire safety and fatal rollover accidents, the delayed introduction of the 2002 model and two recalls for defects. The automaker last week said it will replace 13 million tires made by Bridgestone Corp's US unit.

Still, sales of Ford brand sport-utilities rose almost 1 percent on the strength of the small Escape, which sold 13,362 vehicles and wasn't available a year earlier. Sales of the larger Expedition and Excursion both fell 22 percent.

All three of Ford's luxury import brands saw sales increase.

Sales at Land Rover rose 23 percent while Jaguar rose 1.5 percent and Volvo rose 2.6 percent.

The Taurus, Ford's best-selling car, had a 15 percent sales decline, while Mercury's Cougar fell 36 percent. Sales of the Focus small car rose 7.1 percent.

DaimlerChrysler's Chrysler unit sold 207,487 light vehicles, an 8.3 percent decline. Chrysler minivan sales rose 20 percent, led by the Town & Country, which more than doubled to 12,822.

Dodge Caravan sales rose 13 percent to 25,275.

After three years of declining minivan market share, the Chrysler division has been gaining back sales so far this year.

The company controlled 38 percent of the market through April.

Dealers worked hard last month to get consumers to drive minivans, said Gary Dilts, vice president of sales, adding that he didn't consider US$2,000 discounts a major factor.

"We did not chase the incentives of some of our competitors -- we took it up US$500 just to be polite," Dilts said.

Sales of the retro-styled PT Cruiser sales almost doubled to 10,323. Full-size sedans -- the Concorde, 300M and LHS -- each posted declines of more than 25 percent.
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