Ford sales slip 10.7 pct; Chrysler drops 42 pct

7/1/2009

DETROIT U.S. sales at Ford and Chrysler last month offered sharply different views on the downtrodden U.S. market for cars and trucks.

Ford Motor Co. s June sales showed signs of stabilization, as the automaker posted its smallest sales decline of the year at 10.7 percent. But Chrysler Group LLC, just weeks after exiting bankruptcy protection, reported a 42 percent drop in sales.

Dearborn, Mich.-based Ford has seen its market share grow while rivals Chrysler Group LLC, which emerged from bankruptcy protection on June 10, and General Motors Corp. struggle. Ford said it gained share in June, helped by its midsize Fusion and the Flex crossover vehicle.

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. 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.

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.

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.

Several 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, GM has announced that it will get rid of its Pontiac brand, with incentives rising on those models.

Ford s smaller-than-expected sales drop was helped by sales of the 2010 Fusion midsize car, which rose 26 percent over the previous year s model. Ford introduced the new models in April, including a hybrid version.

Sales of Ford crossover vehicles fell only 1 percent, spurred by a dramatic increase in sales of the seven-passenger Flex. Ford sold 4,784 Flex vehicles in June, a 247 percent increase from June 2008 when Flex sales were only 1,379.

Sales of its giant Expedition sport utility vehicle rose 7.1 percent, likely to due lower gas prices. Nationally, regular unleaded gasoline averaged 2.64 a gallon in June, compared with an average of $4.05 a gallon a year ago.

Sales of the company s popular F-series trucks were down 7.4 percent, but sales of its smaller Ranger truck rose 8.8 percent.

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.

The important takeaway is that we re not going backward, we re not slipping back, Ford s top sales analyst, George Pipas, said Monday. It suggests the worst is behind us, not just the economy, but we may have seen the low point for the year.