Hold the Applause on Auto Sales

Although sales were at their highest this year in May, they still were down 34% over last year.
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Domestic vehicle sales picked up from low levels in May, one more sign of an improving economy.

Perhaps the clearest indication of the gain is that while industry sales normally increase 9% from April to May, they grew 13% from April to May this year, according to Mark DiGiovanni, executive director of global sales analysis for

General Motors



Automakers reporting May sales results said the closely watched seasonally adjusted annualized rate climbed to 10.1 million as a result of the gains, the highest it has been this year. The rate in April was 9.2 million.

"We are starting to see, both globally and in the U.S., the industry starting to we think make a turn for the positive," DiGiovanni said, on GM's sales call. "Leading indicators have been out there turning north and now we're starting to see it translate into SAAR.

seasonally adjusted annual rate"

Still, it is a little early to declare victory. Overall industry sales were down about 34% in May. The numbers are "less awful," said Ken Czubay, Ford vice president for sales and marketing. He said the improved SAAR is about 2.5 million vehicles below the third quarter 2008 rate, and: "It was perilous at that point. (So) this isn't anytime to rejoice. It's just a slight uptick."


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sales analyst George Pipas said sales figures may have been distorted by the forced June closures of some


dealers. "Among terminating dealers, there were some fire sales that were taking place," he said. "Those dealers were highly motivated to get those units off their lot and sold before the deadline."

However, Stephen Landry, Chrysler executive vice president for sales and marketing, said, "I don't know that any of our dealers are having a fire sale." The dealers who are losing their franchises sold about 16,000 cars in May, he said, and "I don't believe they sold at dramatically reduced rates."

As for the outlook, Landry said, "This month is very encouraging, the highest SAAR of this year, so it's definitely off the floor -- it's cautiously optimistic."

For the month, Ford sales were down 24.2%, their smallest decline of the year. GM was down 29.6%. Chrysler retail sales were down 30% while overall sales were down 47%, as the company largely avoided fleet sales after shutting down fleet production.