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In Business This Week
THE AUTO DERBY WAS NEVER HOTTER
VROOM, VROOM. CARS ZOOMED OUT OF THE SHOWROOMS IN MAY. Fueled by a seemingly never-ending spree of incentives, U.S. car and truck sales soared 12% from a year earlier, to 1.51 million. The seasonally adjusted annual light-vehicle sales rate hit 16.3 million--the highest since 1989. The buying bonanza produced some remarkable results for individual auto makers. Recording its first-ever 250,000-vehicle sales month, Chrysler reported sales up 27%--albeit measured against a weak May a year ago. General Motors was up 12%, Toyota 17%, and Honda 18%. Ford lagged with a 1% increase but set a record for truck sales, as did GM and Chrysler. Big Three shares have zoomed--in Ford's case, by as much as 71% since January. But, warns David Healy of Burnham Securities, "that sales rate is not sustainable. We're borrowing from the second half of the year."EDITED BY PAT WECHSLER