Americans who couldn’t bear a new payment and kept driving their old car during the economic downturn are back on the market. With gas above $4 in some parts of the U.S., buyers are leaning toward new fuel-efficient compacts like the Chevrolet Cruze and sub-compacts such as the Honda Fit to save money.
DETROIT (AP) — Appealing small cars, low interest rates, truck deals and unseasonably warm weather helped the auto industry achieve its best monthly performance in almost four years in March.
General Motors Co. (GM) said Tuesday that its U.S. sales rose 12 percent compared with last March on solid demand for cars and small crossovers that achieve 30 miles per gallon or better on the highway. Chrysler Group’s sales jumped 34 percent as buyers went for Fiat small cars and Chrysler sedans.
Toyota Motor Corp. (TM) said sales were up 15 percent, with sales of the Prius hybrid climbing 54 percent for the month. Sales at Ford Motor Co. (F) (F) (F) rose 5 percent as demand for the Focus small car rose sharply.
Americans who couldn’t bear a new payment and kept driving their old car during the economic downturn are back on the market. With gas above $4 in some parts of the U.S., buyers are leaning toward new fuel-efficient compacts like the Chevrolet Cruze and sub-compacts such as the Honda Fit to save money. Also, incentives on trucks are good enough to lure buyers who want something bigger. Ford said sales of the F-Series pickup, the nation’s best-selling vehicle, rose 9 percent.
The consulting firm LMC Automotive has predicted U.S. sales of new cars and trucks reached 1.37 million last month, up 6 percent from March of 2011 and the highest number since May of 2008. Industry analysts say sales could run at an annual rate of 14.1 million to 14.5 million vehicles, continuing the strong performance in January and February.
GM said compact and subcompact car sales were up a combined 62 percent thanks to the new Chevrolet Sonic subcompact. GM sold 8,251 Sonics in March. Sales of the Chevrolet Cruze small car were up 20 percent.
Ford said it had its best March since 2007. Focus sales were up 65 percent compared to last March. But that came at a price. Sales of the Fiesta subcompact fell 34 percent as buyers flocked to the newer and bigger Focus.
For Chrysler, it was the best month for the company in four years. Chrysler says Fiat sales hit 3,712, compared to just 500 last March when the Fiat 500 subcompact was first on the market. The Fiat 500 is growing in popularity as new dealerships open and fuel prices rise.
Sales of Chrysler’s 200 and 300 sedans each doubled over last March. Both cars have recently been revamped and have better fuel economy than previous models, which is attracting new buyers. Jeep brand sales rose 36 percent on the strength of the Jeep Grand Cherokee.
March saw more growth in loans to subprime buyers, which boosted sales. Jefferies analyst Peter Nesvold wrote in a note to investors that non-prime buyers, or those with less than stellar credit, are coming back into the market after being shut out for several years due to lack of loan availability. GM said 9.5 percent of its buyers were subprime in March, compared with 6.1 percent in all of 2011.
AutoNation, the Fort Lauderdale, Fla., auto retailer, said Tuesday that its sale rose 15 percent in March, mostly on the strength of Detroit brands, which were up 26 percent.
Other automakers reporting Tuesday:
– Nissan Motor Co. said sales were up 12.5 percent to 136,317, making it the best month in Nissan’s history. Sales of the new Versa small car rose 41 percent, while Altima midsize sedan sales were up 27 percent. Nissan’s numbers got a boost from higher than usual incentives, which TrueCar.com estimated rose 28 percent to $3,115 per vehicle. Nissan is trying to sell off its remaining Altima sedans before a new Altima goes on sale in July. Industry incentives averaged $2,440 per vehicle.
– Volkswagen AG said its sales rose 35 percent to 36,588, the company’s best March sales since 1973. Volkswagen saw big gains with the new Passat sedan and the new Beetle.