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Chrysler sales soar 33%

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Chrysler sales soar 33%

All major automakers gain during month



Chrysler's 33% surge in U.S. sales last month boosted its market share by one full percentage point -- to 9.5% -- and may help to dispel lingering doubts about its viability post-bankruptcy.

"We surpassed a milestone of 100,000 for the first time in 14 months," Steve Beahm, Chrysler vice president of sales operations, told the Free Press.

For perspective's sake, the Auburn Hills-based Chrysler filed for bankruptcy on April 30, 2009. The following month, it halted production, loans to dealers and consumers had dried up and there was a sense that its future as a going concern was in jeopardy. So Chrysler's strong performance is, in part, because of an easy comparison against last May.

"Chrysler remains a question mark, but this is really good news for them," said Charles Ballard, an economics professor at Michigan State University. "This projects a sense that the worst of the crisis is over and creates a positive psychology that could be self-reinforcing."

Still, the market is improving and lifting all automakers, including Chrysler.

U.S. consumers bought 1.1 million vehicles last month, a gain of 19.1% over last year's recessionary lows. All major automakers posted gains.

Sales were up 22% at Ford and 17.5% at GM, with Toyota trailing major automakers with a 6.7% gain. Last year at this time, Toyota was benefitting from uncertainty surrounding GM and Chrysler.

But after two strong months, the impact of Toyota's incentives to counter its recall stigma began to sputter in May. Toyota's U.S. market share slipped to 14.8% from 16.5% in May 2009, despite a 31% sales boost for its Lexus brand.

"There are still consumers that have questions regarding what has taken place over the last six months," said Bob Carter, group vice president in charge of the Toyota division. "There are some consumers who are still confused."

Other Asian automakers posted stronger performances. Sales were up 32.8% at Hyundai, 24.1% at Nissan and 19.1% at Honda.

Through the first five months of the year, the carmakers up the most are now Subaru (up 39.7%), Volkswagen (up 33.5%) and Ford (up 30.3%).

The seasonally adjusted annual selling rate was 11.6 million in May, well above the anemic 9.9-million rate of a year earlier.

The SAAR indicates what sales would total for the year if demand remained constant for 12 months, adjusting for seasonal factors. It's an easy reference to compare how the market is performing month to month. Before the recession, the SAAR was often in the 15-million to 17-million range.

May's 11.6-million selling rate was slightly higher than expected. Many consumers -- and businesses -- are beginning to feel optimistic enough again to replace aging vehicles and lenders are more inclined to approve loans, according to industry executives.

"I think it we could see that rate closer to 12 million soon if people perceive the economy is improving," said University of Michigan economist Don Grimes.

As gas prices dropped through most of the month, industrywide sales of light trucks, which include some of the most profitable vehicles, gained 22.4% in May. Car sales were up a lesser 16.2%.

Ford's F-Series pickup truck has its strongest sales month since March 2008.

"This was partially driven by sales of the redesigned Super Duty pickup," said Ford sales analyst George Pipas, referring to the recently introduced large version of the work truck.



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