June 2 (Bloomberg) -- U.S. auto sales probably extended the longest tumble in seven years in May as the economy weakened and record gasoline prices drove consumers from pickups and sport- utility vehicles.

Declines at General Motors Corp., Ford Motor Co. and Chrysler LLC will likely pace the industry to its seventh straight monthly decrease, according to a Bloomberg survey of analysts. Japan's Honda Motor Co. may post a gain when automakers report May sales tomorrow.

The industry drop reflects gasoline near $4 a gallon, falling home values and a fading job market that have sapped spending and pulled consumer confidence to a 28-year low. Detroit-based GM, Ford and Chrysler, which rely on pickups, SUVs and other light trucks for more than 60 percent of U.S. sales, are bearing the brunt of the slowdown, analysts said.

``May is all about the accelerated shift from trucks and SUVs to small and mid-size cars,'' said Ford's chief sales analyst, George Pipas. ``The business environment for autos is going to be challenging going forward, as it has been.''

The annualized sales rate probably fell to 14.7 million cars and light trucks last month, down 10 percent from 16.3 million a year earlier, based on a Bloomberg survey of 28 analysts and economists.

GM's sales decreased 23 percent, Ford's 17 percent and Chrysler's 16 percent, according to the survey. Continued sales declines are hampering efforts at each automaker to end losses.

Streak of Declines

The last time the U.S. industry exceeded the current six- month slide was in 2000 and 2001. An 11-month streak that began in November 2000 came as the U.S. was on the brink of recession and most monthly comparisons were being made against figures from 2000, when the industry posted a record 17.4 million sales.

Among the top 10 automakers for sales by volume, only Honda and Mazda Motor Corp. posted sales gains in this year's first four months.

May sales at Tokyo-based Honda may advance 3.2 percent over a year earlier, said Jesse Toprak, an analyst with Edmunds.com in Santa Monica, California. Toyota Motor Corp.'s sales may have fallen 6.7 percent. That would mark the fourth monthly decline of the year for Japan's biggest automaker as rising demand for fuel-efficient cars such as the Yaris fails to make up for the broader economic forces draining U.S. demand.

Narrowing the Gap

Still, Toyota's Camry, the best-selling car in the U.S., gained on Ford's F-Series pickup, the perennial No. 1 vehicle, in April. The gap was 4,797 sales; a year earlier, Ford sold almost 19,000 more F-Series models than Toyota sold Camrys. The most fuel-efficient F Series travels 20 miles on a gallon of gasoline in highway driving, according to U.S. government data. A comparable, conventionally powered Camry gets 31 mpg.

Industrywide, the gap in favor of light truck sales over cars narrowed to 47,141 through April, from 407,970 units last year. The five-year average before 2008 was about a 380,000-unit advantage for trucks in the same period.

May sales probably increased for crossovers such as GM's GMC Acadia that combine car and truck features, analysts said.

The switch to fuel-efficient cars won't be enough to stem further reductions in spending on autos this year, according to economists. Industry sales in the world's largest auto market may fall to 14.7 million this year, the lowest in 15 years, Dearborn, Michigan-based Ford said last month.

Consumer Sentiment

``Spending has slowed everywhere, but the big hit has been in the durable goods sector, which has been pulled down by the collapse in car sales,'' Ian Shepherdson, chief U.S. economist at High Frequency Economics, said in a note to clients. ``With credit tightening, cash flow being squeezed and confidence near record lows, this surely will continue.''

The Reuters/University of Michigan index of consumer sentiment fell to the lowest since June 1980, a report on May 30 showed. U.S. personal spending adjusted for inflation was unchanged in April, according to government figures released the same day, reinforcing forecasts for slowing economic growth.

The U.S. lost jobs for a fifth month in May, signaling the economy is stagnating, economists said before reports this week.

Payrolls probably dropped by 60,000 workers, according to the median estimate of economists surveyed by Bloomberg before the Labor Department's June 6 report.

The economy will expand at a 0.1 percent annual rate from April to June, the least since the 2001 recession, based on the median estimate of 54 economists surveyed by Bloomberg from May 2 to May 8.

The price for a gallon of gasoline rose to $3.97 on May 31, 35 cents higher than at the end of April, according to motorist group AAA.

GM Tumbles

GM may report a 25 percent sales plunge as buyers flock to ``more fuel efficient passenger cars,'' Richard Kwas, an analyst at Wachovia Capital Markets in Baltimore, said in a May 29 note.

Chief Executive Officer Rick Wagoner is expected to detail a plan tomorrow to ramp up production of cars, while lowering it for trucks, according to people with knowledge of his agenda for the automaker's annual shareholders' meeting. The company gets about 60 percent of its sales from trucks.

GM spokesman John McDonald declined to comment on May sales.

The analysts' forecasts are adjusted to reflect one more selling day last month than in May 2007. Unadjusted comparisons, used by Bloomberg and some automakers, would show declines about 4 percentage points lower.

Chrysler: `Weakly Positioned'

Sales at Auburn Hills, Michigan-based Chrysler probably slid 14 percent last month, New York-based Goldman Sachs analyst Patrick Archambault said in a May 30 note. Chrysler is ``the most weakly positioned among the domestic'' automakers for higher gasoline prices, he said, as about 75 percent of its sales stem from trucks.

In early May, Chrysler began guaranteeing buyers of most of its vehicles that they'll pay no more than $2.99 for a gallon of gasoline. The offer has since been extended to July 7 after Chrysler said the incentive helped boost showroom traffic.

Sales ``are certainly not going to be up,'' due in part to a ``dramatic'' cut in sales to business fleets, said Chrysler spokesman Stuart Schorr. He declined to give details.

Ford fell 16 cents to $6.64 at 4 p.m. in New York Stock Exchange composite trading, and has declined 1.3 percent this year. GM rose 34 cents to $17.44. The stock is down 30 percent in 2008. American depositary receipts of Toyota City, Japan- based Toyota gained 46 cents to $102.51, and are down 3.5 percent this year.

GM's 8.375 percent note due July 2033 fell 2.5 cents to 67.5 cents on the dollar, yielding 12.69 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Agency. That's its lowest value since December 30, 2005. Ford's 7.45 percent note due July 2031 lost 1.75 cents to 67.5 cents on the dollar, yielding 11.49 percent.

Credit-default swaps on GM debt rose 33 basis points to 1187 basis points, according to CMA Datavision in New York. Ford's gained 37 basis points to 1089 basis points.

The contracts are designed to protect bondholders against default. A rise in the price indicates a decline in the perception of a company's credit quality.

The following table provides estimates for car and light- truck sales in the U.S. Estimates for companies are percentage changes from May 2007. Forecasts for the seasonally adjusted annual rate, or SAAR, are in millions of vehicles.

The SAAR average is based on forecasts from six analysts and a survey of 13 economists. The analysts' estimates are based on daily selling rates. May had 27 selling days, one more than May 2007.

Analyst                   GM     Ford     Chrysler    SAAR

Himanshu Patel          -25%     -22%      -12%       14.7
 (JPMorgan)
Rod Lache               -16%     -16%      -12%       15.2
 (Deutsche Bank)
Richard Kwas            -25%     -16%      -19%       14.5
 (Wachovia)
Jesse Toprak            -22.2%   -12.7%    -21.2%     N/A
 (Edmunds)
Patrick Archambault     -26%     -21%      -14%       14.7
 (Goldman Sachs)
 Brian Johnson          -23%     -16%      -20%       14.9
 (Lehman Brothers)
 Chris Hopson            N/A      N/A       N/A       14.2
 (Global Insight)

Bloomberg Economists     N/A      N/A       N/A       14.6
(average estimate)

AVERAGE:                -22.9%    -17.3%    -16.4%    14.7

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: June 2, 2008 17:35 EDT