Cobalt keeps No. 1 rank in sales

By Don Shilling

Despite declining sales at GM, the Cobalt posted a 22 percent increase in June.

The high price of gas has the Chevrolet Cobalt back on top.

General Motors Corp. said Tuesday that the Cobalt was its best-selling car in the U.S. for the second month in a row. Previously, the Chevrolet Impala had outsold the Cobalt each month for more than two years.

Cobalt sales reached 20,888 in June, which was 22 percent higher than the same month last year. The car is produced at GM’s Lordstown complex. The other car produced there, the Pontiac G5, saw sales increase 4 percent to 2,566.

The increases came even though sales for GM fell by 18 percent in June. Overall car sales at GM were down 21 percent, while sales of incentive-laden trucks and sport-utility vehicles fell by 16 percent.

The downturn is affecting automakers across the industry, said David Healy, analyst for Burnham Securities. The industry is on a pace to sell about 14 million vehicles this year, while 17 million used to be considered a normal year, he said.

Plants such as Lordstown that produce fuel-efficient vehicles will stay busy, however, he said.

“They are selling out to the wall everything that has decent fuel mileage,” he said.

GM is adding a third shift to the Lordstown complex in August.

GM even stands a good chance of making money on small cars in this environment, he said. Buyers with money to spend are opting for small cars with lots of options, rather than big trucks and SUVs, he said.

This increased interest in fuel economy allows GM to offer fewer incentives on small cars and to sell more models with expensive add-ons, Healy said. GM has traditionally lost money on small car sales.

Healy said cars like the next-generation Cobalt, which will have a turbocharged four-cylinder engine to increase gas mileage, are the wave of the future. The Lords-town complex will launch that car in 2010.

Still, these money-making opportunities can’t come close to matching the large profits that automakers were gaining from trucks and SUVs, he said. That means automakers will continue to look to cut labor costs and other expenses, he said.

Healy said he doesn’t expect GM to be profitable until 2010 at the earliest.

Despite GM’s sales decline last month, it retained its sales lead over Toyota Motor Corp.

The Associated Press reported that GM sold 262,329 vehicles for the month, compared with Toyota’s 193,234. Some industry analysts had expected Toyota to beat GM in the U.S. for the first time, but both companies were hurt by poor sales of trucks and SUVs.

Toyota’s U.S. sales fell 21 percent, while Ford Motor Co. said it sales tumbled nearly 28 percent. Chrysler LLC took a huge hit for the month with sales down 36 percent.

shilling@vindy.com