AUTO INDUSTRY Cavalier, Sunfire sales increase

GM sales were off 12 percent despite strong sales for the Cavalier.
STAFF/WIRE REPORTS
DETROIT -- Cars produced at the General Motors' Lordstown Assembly Plant had huge sales increases last month.
Chevrolet sold 29,542 Cavaliers in May, which was up 62 percent from the 18,261 sold in May 2001.
For the first five months of this year, Cavalier sales are up 8 percent at 114,898.
Pontiac sold 9,405 Sunfires in May, which was up 63 percent from the 5,780 sold in May 2001. For the first five months of the year, Sunfire sales are off 7 percent at 34,203.
Reason for increase
Dan Hubbert, a Chevrolet spokesman, attributed the large increase for Cavalier to several reasons, including a $3,000 rebate that has been placed on the models. Also, a major upgrade is being made to the models for 2003, so dealers are trying to clear out the 2002 models, he said.
Sales also have been spurred by increased advertising by the company and dealers and a normal surge in spring sales as cars are bought when students graduate from high school and college, he said.
Despite the success of the Cavalier, GM reported a 12-percent decline in sales overall, including a 12-percent decline in trucks and a 13-percent drop in passenger cars.
For the year, GM sales are up 3 percent compared with the first five months of 2001.
Ford Motor Co. reported a double-digit percentage sales declines, while the Chrysler Group of DaimlerChrysler AG showed a 4-percent increase for its second consecutive monthly sales gain.
Numbers crunchers for GM and Ford called May an aberration after an unexpected 5-percent overall decline in sales of new cars and trucks. Analyst David Healy of Burnham Securities called it "pretty lousy."
Economist's view
But Paul Taylor, chief economist for the National Auto Dealers Association, said a moderation in sales was to be expected, especially in light of the 6 percent national unemployment rate, which he said is "disqualifying some buyers."
Despite the May decline, GM boosted its second-quarter earnings forecast. GM estimates it will earn $2.50 a share for the April-June period excluding its Hughes Electronics unit, up from prior guidance of $2 per share.
Analysts surveyed by Thomson Financial/First Call were expecting earnings of $2.16 a share for the quarter.
Including Hughes, the second-quarter target is about $2.40 per share, up from $1.90 per share.
For the full year, GM estimates its earnings, excluding Hughes and special charges, will be $6 per share, up from prior guidance of $5 per share. Analysts were expecting earnings of $5.52 a share for the year, according to Thomson Financial/First Call.
Including Hughes, GM said its 2002 earnings guidance is about $5.60 per share, up from $4.60 per share.
Raised earnings forecast
GM said it raised its earnings forecast because of its focus on cost-cutting and plans to step up production by about 400,000 units.
Its Saab unit, meanwhile, reported a 33-percent increase in sales from May 2001.
Ford reported a 12-percent decline in sales for its Ford, Lincoln and Mercury brands last month compared with May 2001.
Its Volvo unit reported a 34-percent drop-off, but the Jaguar and Land Rover brands both recorded record sales.
Chrysler's improvement was powered mainly by strong sales of its minivans, which were backed by a national incentive program, the Jeep Liberty, Dodge Ram pickup and PT Cruiser.