Ford switches to top gear as auto industry picks up pace

But in the world of the postbailout auto industry, that firmament has gradually shifted, as Ford has introduced appealing fuel-efficient models while GM has contracted, dropping brands and reducing capacity.

On Monday, Ford continued to chip away at its rival, reporting a robust 14%gain in American sales in May, to 246,000, about 6,000 behind GM, which reported a tepid 3% gain. Chrysler reported an 11% sales increase, to more than 166,000, beating analyst expectations. The strong performances by Ford and Chrysler helped the overall industry to stay on track to sell more than 15 million vehicles this year for the first time since 2007, before the financial collapse that sent carmakers into a tailspin. All automakers combined to sell 1.44 million new vehicles?in the US in May, an 8.2% gain over the same month in 2012.

?The industry is settling into a healthy place where supply and demand are meeting,? said Jessica Caldwell, an analyst with the auto research site Edmunds.com, ?but demand is still growing. We?re edging our way into what would be the sweet spot for sales.?

Now demand is driving supply, with Ford, Chrysler and Toyota adding more production and more jobs at United States plants to capture sales momentum. On Monday, Ford announced plans to increase capacity by 10% to 740,000 vehicles, in the third quarter, as it strives to meet increasing demand for its SUVs and midsize passenger cars.

Ford?s sales increase was driven not only by continued strong demand for large pickups and sport utility vehicles but also by rising sales of its smaller models, like the Fusion, Focus and Fiesta. Sales of the automaker?s Fusion midsize sedan, for example, rose 10%, to 29,553 vehicles, for its best May ever.

Ford also reported strong sales of its Escape utility vehicle, which also had its best month ever, and the Lincoln MKZ, which soared 42% for its best May on record. GM, by contrast, continues to struggle in some major passenger car categories even as other segments like trucks remain strong. Its passenger car sales slipped 6.4%, in part because of a 31.7% decline for its full-size Chevrolet Impala and a 36.1% drop for its Chevrolet Malibu midsize sedan. Its Buick LaCrosse, down 15.2 percent in May, and Regal, down 37%, also struggled.

In a sign of GM?s urgency, on Friday it unveiled a refreshed version of its Malibu, only a year after introducing a revamped model.

GM, which sold 253,000 vehicles in May, did have success in its smaller cars, maintaining sales for its midsize Chevrolet Cruze while introducing the smaller Chevrolet Spark and Sonic models.

?It?s not necessarily saying GM?s performance was bad, because it wasn?t,? Caldwell of Edmunds.com said. ?It was just that Ford was better. Ford has a balance in their portfolio, while GM is a little more hit or miss.?

The strongest sales across the industry remained in pickups and SUV?s, which rose 10.9% to 718,890 vehicles in May, in contrast to a 5.7% increase in car sales, to 725,736 vehicles.

Sales of Ford?s F-Series rose 30.6%, while Chrysler?s Dodge Ram truck brand climbed 21.6%. At GM, large pickup truck sales rose 23%, accompanied by a 25.3% gain for its Chevrolet Silverado truck, the country?s No. 2 best-selling vehicle with 43,283 units sold.

The 19.2% rise in pickup truck sales continues to reflect strong marketplace demand after a recovery in the housing market and a surge in the construction and oil industries.

Automakers also cited an ageing fleet of pickups and pent-up demand. NYT