Bankruptcy matters in auto sales

Business Week:

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Ford (F) posted a decline of just 10.7% in June, the lowest drop of any major automaker. That stood in stark contrast with the fortunes of the two members of the Big Three that sought bankruptcy, General Motors and Chrysler. Chrysler saw sales tumble 48% as it sold practically no vehicles to rental fleets last month and its factories were idled during its Chapter 11 proceedings. GM, which is just behind Chrysler in its own bankruptcy reorganization, posted a 33% sales decline. GM sales and marketing chief Mark LaNeve said he is hopeful that GM's Chapter 11 process won't last too long. "People are looking for a quick exit from bankruptcy like Chrysler had," he said.

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Toyota and Honda were also down significantly more than Ford. They were just behind GM in sales decline. It apparently was from a refusal to lower prices during a down market. Ford continues to increase its market share which should position it well for a recovery.

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