May auto sales limp amid Chrysler, GM turmoil

By David Bailey and Nick Carey

DETROIT (Reuters) - A late month surge in sales from Chrysler dealerships that are losing their franchises as part of the automaker's bankruptcy may have driven U.S. auto sales in May to levels above those seen in recent months.

But automakers are expected to report steep sales declines from a year earlier with the U.S. economy in a tailspin, the industry reeling from Chrysler's bankruptcy on April 30 and an expected General Motors Corp bankruptcy filing on Monday.

"We will probably see a little upside, a little pop," said Mirko Mikelic, an analyst at Fifth Third Bank. "But other than that sales will probably be much the same as in April."

"More people will probably have been looking at cars," he added. "But consumers are not ready to open their wallets."

Deutsche Bank said it expected light vehicle sales to be down 36.5 percent year-over-year in a survey taken just before the Memorial Day weekend, which is seen as the start of the busy U.S. summer driving and car buying seasons.

The six largest automakers all are expected to post sales declines from a year earlier, led by a 54 percent drop at Chrysler, according to industry tracking firm Edmunds.

DEATH RATTLE

A late May sales surge at dealerships being eliminated may have pushed Chrysler's sales higher and the industry as well, Ford's chief sales analyst George Pipas said on Friday. That would not indicate a sustained recovery in sales, he said.