Ford Expects Rise in U.S. Retail Sales in May
DETROIT - May 30, 2007: Poornima Gupta writing for Reuters reported that Ford Motor Co. said it would see an increase in U.S. retail sales in May for the first time in six months, but overall sales were expected to decline as the automaker continued to cut low-margin sales to daily rental companies.
"We will be reporting an increase in retail sales this month," Ford chief sales analyst George Pipas told reporters on Tuesday evening, adding that crossover sport utility vehicles and cars were driving the improvement in showroom sales.
But a 20 percent reduction in sales to daily-rental companies would drag Ford's overall U.S. sales in May down for a "single-digit" percentage decline, Pipas said.
"My expectation at this point is total sales, including a 20 percent reduction in daily rental, would result in a decline," Pipas said.
The sales analyst said industry sales volume appeared to be rebounding from a weak April based on purchase data from the first 20 days of the month.
"Retail business for the industry may be equal to or higher than a year ago," Pipas said.
U.S. auto sales stalled in April as a weaker housing market and higher gas prices hurt consumers, raising further doubts about the industry's outlook for the remainder of the year.
Pipas said sales of small cars and crossover SUVs have jumped from last month as gas prices continued to rise.
There appeared to be a "big lift in small car sales industrywide," he said.
However, the pickup truck segment had yet to rebound from the ripple effect of a weak housing market, Pipas added.
Pickup trucks, typically purchased by construction workers, have been hurt by a weak housing market. Ford's pickup trucks have also had to compete with newer models in the segment such as General Motors Corp's new Chevrolet Silverado and Toyota Motor Co's Tundra pickup trucks.
Ford's sales fell are down about 13 percent so far this year, with sales of its best-selling F-Series down nearly 14 percent.
Ford and other automakers are due to report May U.S. sales on June 1.
U.S. industry-wide light-vehicle sales slipped to an annualized rate of 16.27 million in April, down from 16.69 million a year ago and the weakest tally since November.
Detroit automakers had forecast a flat to slightly weaker vehicle market going into 2007 before the pressure intensified on subprime lenders.