Chrysler's U.S. Retail Sales Rose Despite Bankruptcy

Sold more vehicles in May than any other month this year

Chrysler said on June 2 its dealers managed to sell more vehicles to retail customers in May than any other month so far this year despite the fact that it was in bankruptcy protection.

Chrysler said its share of the U.S. retail market also was higher than both last year and last month with 74,741 vehicles sold even though retail sales were down 30% from May 2008.

The automaker's fleet sales, however, were down 90% pushing May's total sales down 47% to 79,010 vehicles.

Chrysler's total market share slipped to 8.5% in May from 9.4% in April and 10.6% in May 2008, according to Autodata.

The strong retail sales in the weeks following Chrysler's April 30 bankruptcy filing bode well for the newly restructured company which is expected to emerge from bankruptcy protection in the coming days.

"We are pleased that consumers responded to Chrysler's reorganization by purchasing our products, resulting in our best retail sales month of the year," said Jim Press, Chrysler's vice chairman and president. "The uncertainty that has been surrounding Chrysler for the last few months is coming to an end, and a vibrant, new company is beginning to take shape," Press added. "One that will better serve our customers and dealers with a broader and more competitive lineup of environmentally friendly, fuel-efficient, high-quality vehicles."

"Retail sales for the industry came in stronger than expected and our retail performance during our restructuring was even stronger than the industry, giving us improved share and optimism that the market is showing signs of life," Press added.

But Chrysler's competitors cautioned that a significant portion of May's sales could be attributed to "firesale" deals offered by hundreds of Chrysler dealers trying to clear their inventory after being notified that their contracts would be terminated.

Chrysler said it was "taking actions to assist in the redistribution of remaining eligible inventory of dealers who had their sales and service agreements rejected" to remaining dealers.

Chrysler said it finished May with 260,407 vehicles, an 86 day supply. Its inventories were nonetheless down 37% compared with May 2008 when they totaled 412,009 units.

Total U.S. auto sales were down 33.7% at 925,824 vehicles compared with May 2008, according to Autodata, but the seasonally adjusted annualized rate of 9.91 million was the industry's best performance this year.

Copyright Agence France-Presse, 2009

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