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In the first positive sign that an economic turn around may be on the horizon for the global automotive market, US sales have shown their smallest decline in nine months.

American vehicle sales fell 27.7 per cent in June, marking the smallest drop for the industry in nine months, but dashing hopes that demand would rise to a 2009 high.

Ford Motor Company’s 10.7 per cent slide, its smallest in 16 months, wasn’t enough to keep the seasonally adjusted sales rate from slipping to 9.5 million, below analysts’ projections of 10 million, and well below the 13.1 million from June 2008.

Ford World Headquarters Building (Henry Ford II World Center)

“Still, the industry is recovering, every single month has been better” said Patrick Archambault, an analyst with Goldman Sachs, according to US industry website Autonews.

“We’re in a bit of a holding pattern here for one month, but there’s a lot of market drivers that are turning positive that should really help sustain an improvement once you get into the second half of the year.”

Continuing it trend Ford fared better than other major carmakers.

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It now stands at number two in US sales through the first half of the year after ceding the spot to Toyota in 2007.

Ford’s market share grew to 16.1 per cent, ahead of Toyota’s 16.0 per cent, but lagging behind General Motors’ 19.7 per cent.

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GM’s June sales were down 33.4 per cent, and Chrysler Group LLC, now under the control of Italy’s Fiat, tumbled 41.9 per cent, as both companies slashed deliveries to fleets. Toyota slid 31.9 per cent for its second-smallest drop of the year.

Industry sales fell to 860,101, after rising above 900,000 in May for the first time this year.

The second quarter was a “breakthrough” for Ford, Jim Farley, group vice president for marketing and communications, said in a conference call. While sales didn’t increase, consideration and brand image did, he said.

2009 Ford Taurus

June marked the 24th year-over-year monthly decline in 25 months, but analysts still foresee some recovery in the next six months.

“On a six-month lag basis, consumer confidence has been a strong predictor, so it still points to a back-half recovery,” Mr Archambault, of Goldman Sachs, said.

Analysts forecasting a second-half improvement in sales also say the cash-for-guzzlers legislation President Barack Obama signed last week will improve car-buying interest and perhaps generate sales.

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The measure offers vouchers of as much as US$4500 to consumers who scrap gas-guzzling vehicles and buy new ones with better fuel economy.

Predictions of the law’s effectiveness in boosting sales have been mixed, but, again, Mr Archambault said it should bump sales rates starting in August.

He said: “If all it does is add another 100,000 units to August, that’s going to add another 1.2 million units to the Seasonally Adjusted Annual Rate (SAAR).”






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