Company’s U.S. auto sales fall

Wednesday, June 1, 2005 | 9:14 a.m.

DaimlerChrysler AG said May U.S. auto sales fell 2.5 percent to 232,386 as demand for new models at the Chrysler group dropped for the first time this year.

Sales of Chrysler, Dodge and Jeep-brand models fell 2.5 percent to 214,575, and sales of Mercedes-Benz fell 1.8 percent to 17,811. General Motors and Ford Motor Co., with combined U.S. market share of more than 40 percent, are expected to post declines in car and light truck sales later today, according to each of five forecasters surveyed by Bloomberg.

A fifth-straight month of declining market share for GM and Ford may prompt further production cuts. A GM decline may also raise pressure on the automaker to restructure its automotive operations, after a $1.1 billion first-quarter loss and a downgrade in its debt to "junk" level by Standard & Poor's and Fitch Ratings.

"Ever seen erosion when water runs down the hill and you can't stop it? It's going to be more of the same with the domestics continuing to lose ground and the Asians continuing to gain ground," said Frank Ursomarso, a Wilmington, Delaware, dealer. He sells GM's Pontiac and GMC brands, Ford's imported Volvo and Jaguar cars, and BMWs from Munich, Germany-based Bayerische Motoren Werke AG.

Overall U.S. sales are expected to drop to an annual average rate of 16.8 million cars and trucks, from 17.7 million a year earlier. The May 2004 rate was that year's second highest.