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US car makers see fall in sales

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by Kay Mitchell

“The Big Three” US carmakers reported a slump in sales in June compared to the same month last year.

General Motors (GM) said sales fell 33.6%, while Chrysler sales declined by 42%.

However, Ford, which is the only one of the three not to have gone bankrupt, said sales were down 10.9% compared with a year earlier – a much smaller drop than in previous months and raises hopes that car sales may be recovering.

The global economic downturn has resulted in a slump in demand for big-ticket items, such as cars. This has affected carmakers worldwide with many cutting back on production, slashing jobs and seeking funding to see them through the downturn.

Car sales in the US have also been hit particularly hard over recent months due to bankruptcies at both GM and Chrysler.

GM declared itself bankrupt in early June and symbolised the largest collapse of an industrial company in US history. Fellow US car giant, Chrysler, also filed for Chapter 11 bankruptcy protection at the end of April.

However, the latter emerged from bankruptcy protection last month and Fiat bought its strongest assets.

On a positive note, GM said people are coming back into dealerships and Mark LaNeve, vice president, GM North America sales, service and marketing, said: “We’re pleased with our retail performance for the month, and it shows consumers’ strong attraction to our products … which all saw retail sales gains compared with May.”

The US is expected to introduce a “cash for clunkers” scheme to boost sales. Similar schemes have been launched in Germany and the UK and are proving to be quite successful.

The scheme pays consumers to get rid of their old cars and replace it with a more environmentally friendly car.

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News posted: July 2, 2009

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