U.S. automakers set record with profitable sales growth

Southfield, Mich. - A half-decade after the near-death of American automaking, the Detroit Three have reached an unprecedented milestone: They're boosting sales while remaining consistently profitable.

May U.S. auto-sales numbers, released Tuesday, are projected to show Americans are continuing to buy more cars. Vehicle deliveries in the United States may have risen 6.5 percent to 1.54 million, the average of estimates compiled by Bloomberg. Adjusting for seasonal trends, automakers are on pace to sell 16.1 million vehicles this year, according to the estimates.

General Motors, Ford and Chrysler are reaping the benefits after restructuring to shed brands, shut unneeded factories and gain flexibility in labor contracts. Their margins also reflect the financial impact of increased U.S. energy output, widely available credit and management's resistance to the heavy discounting car companies long used to prop up sales at the expense of profit.

The result is a lineup of U.S.-made cars and trucks that compare favorably with vehicles made by Toyota, Honda and other foreign manufacturers - showing how far the industry has come since June 2009, when GM filed a government-backed bankruptcy one month after Chrysler's Chapter 11 filing.

"Short of calling 2009 and bankruptcy a lucky break, it's two different companies, different management, different products," said Kevin Tynan, auto analyst for Bloomberg.

Testament to Detroit's comeack is GM, whose sales may rise 6.5 percent, according to the analysts surveyed by Bloomberg. The company is growing even as it moves this year to recall 14 million vehicles in the U.S., including 2.59 million small cars no longer in production for a faulty ignition switch linked to 13 deaths - suggesting buyers see the flaws as a legacy of the past company, rather than a defining moment of today's GM.


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