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Car Sales Dip as GM, Japanese Tumble

Ford sales flat, but Chrysler, Koreans buck the trend with comfortable gains.

by on Jun.01, 2011

Even the biggest Chrysler products gained ground in May. The maker was the only one of Detroit's Big Three to post a gain.

Crushed under the weight of declining consumer confidence, rising gas prices, lower incentives and shrinking inventories of Japanese-made vehicles car sales took a sharp tumble in May, though some makers, including long-struggling Chrysler, managed to buck the downturn.  It was the first significant downturn for the industry since the American market began to recover in late 2009.

The biggest losers were Japanese makers, like Toyota, who expect to continue being hammered for months by the impact of the March 11 earthquake and tsunami , which nearly shut that country’s auto industry down for a month.  Some key models, such as the new 2012 Honda Civic aren’t expected to be back in full supply until late this year.

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But General Motors also saw an unexpected dip in demand reflecting sluggish sales of its big trucks even as consumers rushed to buy the maker’s new and more fuel-efficient small cars.

Overall, analysts described May as a disconcerting start to what is normally the annual spring buying season.  Sales had, in fact, been rising steadily all year, reaching a seasonally-adjusted annual sales rate, or SAAR, of 13 million in April.  But for May the annualized rate dipped to just 12 million.