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Published June 03, 2009 09:59 am -
Discounts, not efficiency, drive US auto sales up
DETROIT (AP) — Americans bought more cars in May than in any other month this year, drawn by fire sale prices that pushed General Motors' and Chrysler’s sales above expectations despite their forays into bankruptcy protection. Overall sales were still 34 percent lower than a year ago.
But low gas prices encouraged the sale of bigger vehicles while small cars stacked up on dealer lots. That could be a problem for the Obama administration, if the demand for more fuel-efficient vehicles drops just as it is forcing the U.S. auto industry to produce more of them.
“The great migration away from fuel efficiency is once again under way,” said Mike Jackson, chairman and chief executive of AutoNation Inc., the nation’s largest automotive retailer. “The price of gasoline determines the type of vehicles consumers buy. Period.”
All major automakers including Toyota and Honda posted drops from last year, with Ford Motor Co. benefiting from the financial woes of its Detroit competitors and recording the smallest decline at 24 percent.
GM and Chrysler have pegged their recoveries to fuel efficiency — Chrysler with small cars from Fiat SpA, GM with new American-built compacts and subcompacts, and both with plans for electric vehicles. It could take months of expensive gas for people to buy their new products.
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