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Big Three sales fall in May

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#1 ·
http://www.detnews.com/apps/pbcs.dll/article?AID=/20060527/AUTO01/605270370/1148

Big Three sales fall in May
Rising interest rates, gas prices cited for keeping customers away from auto showrooms.
Bryce G. Hoffman / The Detroit News

May is shaping up to be another lackluster month for Detroit's automakers, as rising interest rates and gasoline prices turn some shoppers away from dealer lots.
While sales results will not be released until Thursday, some dealers have seen demand decline slightly over the past few weeks.
"It's been a little slow," said Steven Zehnder, sales manager at Zehnder Chevrolet-Buick in Frankenmuth.
Wall Street also is taking a dim view of the month.
Brian Jacoby, an analyst with Goldman Sachs in New York, expects a seasonally adjusted annual selling rate of approximately 16.1 million units in May, down from the 16.7 million pace reported last month and in May 2005.
"Soft retail sales, particularly at the Detroit Three, are the main reason for the decline," Jacoby said. "Sales should continue to look strong at both Toyota and Honda, given their new product launches."
Toyota recently launched the Yaris compact and Camry sedan, while the Honda lineup has expanded with the Fit compact.
Himanshu Patel, who follows the industry for J.P. Morgan in New York, also is expecting a year-over-year decline, predicting that sales will fall to 16.3 million units on an annualized basis.
Analysts expect General Motors Corp. to lead the decline, with a drop of between 10 and 14 percent compared to the same period in 2005. Sales at Ford Motor Co. are expected to fall between 6 and 8 percent for the month, while DaimlerChrysler AG's Chrysler Group sales are expected to be down about 5 percent.
In April, new car and truck demand fell 3.7 percent, and industry sales remain down 0.3 percent for the year.
GM and Ford also are expected to announce revised North American production plans for the third quarter of 2006, providing more signals of how robust both auto giants see demand in coming months.
Analysts predict GM will cut third quarter production by between 6 and 9 percent, largely as a result of decreased demand for sport utility vehicles.
"We expect vehicle mix to remain under pressure as demand for mid- and full-size SUVs continues to fall, driven by higher gasoline prices," Jacoby said.
Opinions are more divided about Ford. While Jacoby expects Ford to cut third-quarter production by 5 percent, Patel said the automaker may actually boost production by 2 percent to keep up with growing demand for its new mid-sized sedans. The Ford Fusion and its siblings, the Mercury Milan and Lincoln Zephyr, were still in ramp-up mode during the third quarter of 2005......
http://www.detnews.com/apps/pbcs.dll/article?AID=/20060527/AUTO01/605270370/1148


So, to summarize. GM will lead the decline by 10 to 14%. Ford is boosting production by 2% to keep up with demand of the Fusion. And DCX is down, too. Looks like the same thing we always hear every month except for Ford boosting production.
 
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