were starting to party Wednesday, July 1,
as the company reported
its smallest sales decline
since July of last year,
from the worst slump in 27 years.
U.S. car and truck sales showed signs of stabilizing in June after a year of sharp declines, but every major automaker except Honda Motor Co. reported lower sales than in May.
Still, year-over-year declines last month slowed for four of the six major carmakers, with Ford Motor Co. reporting the smallest drop in a year at 10.7 percent when compared with June of 2008.
Even Chrysler, which emerged from bankruptcy protection early in June, saw its year-over-year sales decline shrink, and analysts say that's among the signs that an auto industry 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, executive director of industry analysis for the auto Web site Edmunds.com.
Factors such as a 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.
And while Chrysler's sales results were dismal, the figures were roughly in line with analyst estimates and reflect a company that is in a major transition following bankruptcy protection and new focus on more fuel efficient vehicles.
"At a time when they are emerging from bankruptcy and trying to reinvent themselves, it is not a huge surprise," Toprak said.
Toprak said affordability and gas prices that rose from $2.28 per gallon in May to $2.64 in June boosted sales of sales of compact cars, hybrids and compact sport utility vehicles.
Families and consumers looking for larger vehicles are also leaning more toward minivans because of the practicality when compared to alternatives like low gas mileage SUVs, he said.
Economists say there are signs that the economy is recovering, with housing starts rising more than expected in May and wholesale prices remaining in check. But the Conference Board reported Wednesday that consumer confidence fell unexpectedly in June.
"We're making steady progress," Jim Farley, Ford's group vice president of marketing, said in a statement. "We remain grounded, however, given challenging industry and economic conditions."