- The Washington Times - Wednesday, June 3, 2009

DETROIT

Chrysler LLC’s U.S. sales fell 47 percent in May as the fleet market dried up, but the company said being under bankruptcy protection did little to deter individual buyers from purchasing its vehicles.

Chrysler said Tuesday it sold 79,010 cars and light trucks last month. The company said its sales were pulled lower because it didn’t sell any cars to fleet buyers like rental car companies, but its retail sales to individual customers were the best they’ve been all year.

With 789 dealers set to stop selling the company’s cars next week, many of those purchases were fueled by deep discounts. Chrysler had the highest average incentive among automakers last month - $4,159 per vehicle, according to Edmunds.com.

General Motors Corp.’s sales fell 30 percent from a year ago, but they improved 11 percent from April as consumers pushed the automaker to its best sales month this year.

Ford Motor Co. posted even better results as it continued to snatch market share from its crosstown rivals. Ford said its May U.S. sales fell 24 percent from last year but rose 20 percent from April, and its share of the U.S. market rose to the highest level since 2006.

Other automakers reported month-to-month improvements Tuesday, one day after GM filed for bankruptcy protection in New York.

Toyota Motor Corp. said its U.S. sales fell 40 percent from last year but climbed 21 percent from April. Honda Motor Co. reported its year-over-year volumes dropped 41 percent, while Nissan Motor Co. said sales fell 33 percent.

“The May results should be interpreted with some caution, given the current volatility in the marketplace,” said Emily Kolinski Morris, senior U.S. economist for Ford, in a conference call with reporters.

Auburn Hills-based Chrysler filed for Chapter 11 protection in April and is preparing to exit bankruptcy under an operating agreement with Italian automaker Fiat SpA. Chrysler and GM had resisted entering bankruptcy protection, saying their sales would plummet because consumers would be afraid to make a big purchase from a company in bankruptcy court.

Industry watchers said improved consumer confidence helped draw buyers into showrooms. While sales remained depressed compared with last year - and are likely to remain that way for the rest of 2009 - automakers were optimistic that they had hit bottom.

“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 Toyota Motor Sales USA.

Dearborn-based Ford said it sold 161,197 cars and light trucks in the U.S. last month. Sales of the Ford Fusion rose 9.4 percent as the company began selling 2010 models of the midsize sedan along with a hybrid version. Ford said it sold a record number of Fusions - 19,786 in May - which was surpassed only by sales of its F-series pickup trucks.

GM said it delivered 191,875 vehicles in May, helped by 110,866 truck sales.

GM entered bankruptcy protection with the hope of emerging within 60 to 90 days as a smaller, less debt-burdened company.

The Pontiac, Hummer, Saturn and Saab brands accounted for the company’s biggest sales declines. GM has said it plans to get rid of those divisions as part of its restructuring and stick to four core brands: Chevrolet, Buick, Cadillac and GMC.

Saturn sales fell 56 percent, and Pontiac sales were down 52 percent.

Mark LaNeve, GM’s vice president of North American sales and marketing, said the automaker expects to lose some market share, given the sell-off or phasing out of some of its brands, but it doesn’t expect its share to fall below 16 percent.

The fact that a bankruptcy filing loomed over the company throughout the month of May did not hurt sales, he said, adding that consumers may have become “desensitized” to news of the bankruptcy protection filing.

“Obviously it gives us a lot of confidence that some of the negative issues we had to deal with are behind us,” he said in a conference call with reporters and industry analysts.

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