GM Sees Signs Of Indus Emerging From Global Downturn-Executive
02 Juni 2009 - 10:09PM
Dow Jones News
General Motors Corp.'s top sales executives said the automotive
industry appears to be in the early stages of emerging from the
global downturn that helped push both the company and Chrysler LLC
into bankruptcy.
"We are starting to see both globally and in the United States
that the industry is starting to turn for the positive," said Mike
DiGiovanni, GM's executive director of global market and industry
analysis. "We think that we are starting to emerge from this global
downturn."
GM, which filed for bankruptcy protection on Monday, said May
sales fell 29.6% compared with the same period a year earlier.
However, sales increased 11% when compared to April.
Ford Motor Co. (F) saw its sales increase 20% compared to April
while Chrysler LLC had an 8% increase. Chrysler LLC filed for
bankruptcy April 30. The company is in the process of merging its
assets with Fiat SpA.
Automakers have been waiting for sales to bottom since tight
credit markets, combined with a collapse in home prices, have
pushed car sales to historic lows over the past several months.
GM and Ford executives expect the annualized selling rate in May
to finish at the 10 million mark, a jump from the 9.3 million rate
for the month of April. The selling rate was 14.3 million new cars
and trucks in May 2008.
DiGiovanni cautioned that the industry must continue to keep an
eye on rising oil prices.
"Gas prices increased from $2.10 to $2.32 a gallon in April to
May," DiGiovanni said. "They are still down a lot from last year
but these are the highest gas prices we have seen since October
2008."
Mark LaNeve, GM's vice president of North America sales, said
the worst, in terms of the bankruptcy news, appears to be behind
the company and will have a negligible impact on the company in the
future.
GM, like Chrysler, is also planning to trim dealers, but at a
slower rate. The company notified about 1,000 dealers that they
could be cut from the network. Those dealers will be closed through
the end of the year.
Chrysler told 789 dealers last month that they will have to
close and leave the network by June 9. The dealers are responsible
for getting rid of inventory that has caused some dealers to slash
prices.
"We will not have fire sales," LaNeve said. "We will also offer
our dealers modest financial help as we wind them down."
LaNeve declined to comment on a report by The Wall Street
Journal that GM will sell its Hummer brand to Sichuan Tengzhong
Heavy Industrial Machinery Co., a little-known Chinese company.
-By Jeff Bennett, Dow Jones Newswires;
jeff.bennett@dowjones.com; 248-204-5542