Automakers paint smaller sales decline as progress

Ford and Toyota, calling a recovery, even bragged of plans to boost production in the third quarter, while several companies mentioned improved consumer credit despite the fact that it's nearly impossible to get a car loan with a credit score below 720 these days.

Optimism aside, the market continues to hover far below what would have been called depressed levels just a year ago. On an annualized basis, industry sales in June hit a level of 9.7 million units, according to Autodata, 40 percent below the industry's sales rate for most of this decade.

Moreover, sales for domestic and import brands remained very weak in several key regions. Chief among them has been California, the largest U.S. auto market. With its ongoing housing crisis and high unemployment, even Toyota, practically the home team in Southern California, had trouble selling cars in the Golden State last month.

“The overall industry is doing worse in California than anywhere else in the country,” said Bob Carter, Toyota's U.S. general manager.

A year ago, the industry was on pace to sell 13.6 million vehicles. But the soaring price of gasoline, which peaked in July 2008, hammered vehicle sales, prompting industry executives to predict impending disaster.

Those predictions were on target, and the last 12 months have been the most brutal, in terms of sales, that the industry has faced in at least three decades. For all of 2008, sales declined 18 percent. Through the first five months of this year, they were down 37 percent.

Now the same executives are hoping that a fresh set of predictions will prove as prophetic: Automakers are calling for improved sales in the third and fourth quarters that would pull the full year results up to about 10.5 million cars and light trucks sold.

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