Slower auto sales decline is good showing

DETROIT --- After a yearlong free fall in the American car market, the decline of sales slowed in June, offering hope to automakers that the bottom has been reached and more shoppers might slowly start returning to showrooms soon.

Still, sales were down 7.1 percent from May, which generally is a stronger sales month.

Overall, automakers sold 859,847 vehicles in June, a 28 percent drop from the same month last year, according to Autodata Corp.

Sales declines slowed for four of the six major carmakers, with Ford Motor Co. reporting the smallest drop of 10.7 percent. For many months, Ford and other companies have been reporting year-over-year declines of 40 percent or more.

Even Chrysler, which emerged from bankruptcy protection early in June, saw its decline shrink.

Analysts say that's among the signs that the auto industry's slump that began with $4-per-gallon gasoline last summer could be leveling off.

"It is unlikely things will get any worse," said Jesse Toprak, the executive director of industry analysis for the auto Web site Edmunds.com.

The slowly improving economy and government incentives of up to $4,500 to trade in inefficient clunkers for new vehicles could lead to modest improvements in the second half of the year, he said.

In anticipation of heightened traffic at dealers and higher sales later this year, Ford has increased its production order by 25,000 vehicles for the third quarter.

"We're making steady progress," Jim Farley, Ford's vice president of marketing, said in a statement. "We remain grounded, however, given challenging industry and economic conditions."

And while Chrysler's sales results were dismal -- only 68,297 cars and trucks, many sold because of incentives of more than $4,800 per car -- that's about what analysts expected.

"At a time when they are emerging from bankruptcy and trying to reinvent themselves, it is not a huge surprise," Mr. Toprak said.

Affordability and rising gas prices -- from $2.28 per gallon in May to $2.64 in June -- boosted sales of compact cars, some hybrids and larger crossover vehicles, which have the seating and cargo space of a sport utility but are built on car underpinnings so they are more efficient and maneuverable.