US car sales recovery led by GM

Demand for hybrid and smaller passenger cars amid rising fuel prices helped US car sales rebound from a weak spring.

General Motors (GM) led the increase as sales were up 12.8% on May last year after it sold 371,056 light vehicles.

Elsewhere, Japanese rival Toyota ousted US group Ford from the number two spot with a 10% jump in sales while Ford sales sank 6.9%.

Sales were driven by smaller, more fuel efficient cars as petrol prices hit record highs around $3 a gallon.

"We saw strong total and retail sales increases," said GM's vice president of North American sales, Mark LaNeve.

"Our significant market share gains in full-size trucks and crossovers validates the decision we made to invest in industry-leading fuel economy in these important segments."

Overall, sales of GM cars rose 16.2% while light truck sales gained 5.6%.

Fuel worries

Toyota car sales also rose 16.2% - as Camry passenger cars sales rose and its sales of its hybrid Prius surged to a record 24,009 from 8,103 in May last year. Light truck sales rose 10.9%.

"As fuel prices and consumer confidence rose, the industry saw a move to passenger cars," said Jim Lentz, Toyota's US executive vice president.

Elsewhere, fellow Asian carmaker Nissan also recorded a 7.4% increase in sales, thanking a good performance from its fuel-efficient small cars for the rise.

DaimlerChrysler - which last month agreed to sell a majority stake in its ailing US arm to Cerberus Capital for 5.5bn euros ($7.41bn; £3.7bn) - also said sales were up 3.9%.

On the downside, Ford - the second biggest carmaker in the US - and Asian carmaker Honda both unveiled a decline in sales.

Ford said overall vehicle sales fell 6.9% as car sales dropped by 17.7% while truck sales remained flat.

The company blamed slackening demand for its saloon cars and a planned cut in sales to rental fleets.

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