Are we seeing the bottom of the depression in the car industry? That's the tantalizing question prompted by the June sales numbers reported for the auto industry today.

An Associated Press snippet:

DETROIT (AP) After a yearlong free fall in the American car market, the decline of sales slowed in June, offering hope to automakers that the bottom has been reached and more shoppers may slowly start returning to showrooms soon.

Still, sales were down 7.1 percent from May, which generally is a stronger sales month.

Overall, automakers sold 859,847 vehicles in June, a 28 percent drop from the same month last year, according to Autodata Corp.

Sales declines slowed for four of the six major carmakers, with Ford Motor Co. reporting the smallest drop of 10.7 percent. For many months, Ford and other companies have been reporting year-over-year declines of 40 percent or more.

Even Chrysler, which emerged from bankruptcy protection early in June, saw its decline shrink. protection. GM plans to sell or close Pontiac, Saturn, Hummer and Saab to focus on four core brands - Chevrolet, Cadillac, GMC and Buick.

June sales from other automakers indicated that the industry downturn has begun leveling off. Toyota's U.S. sales fell 32 percent in June to 131,654 units - a smaller decline than in
previous months for the Japanese automaker.

 

Caution is warranted before spinning these data as a turnaround for the auto industry. Many U.S. consumers are still burdened with record levels of debt and concerns about possible joblessness that have made them much more conservative spenders.

A massive loss of household wealth in the past two years as home prices crashed has contributed to more cautious consumer spending which in turn, combined with the other factors, are leading consumers to extend the lives of their current vehicles, according to experts.

Meanwhile, there are real questions as to whether the economy is actually pulling out of recession or just bumping along at bottom.

So while the June numbers are comforting in that the auto industry appears for the time being to have put the brakes on its runaway downhill roll, it's still seems much too early to celebrate.