US auto industry back in the fast lane
DETROIT - The US auto industry’s recovery has moved into the fast lane. With gas prices at nearly $4, smaller cars like the Ford Focus, Nissan Versa, and Fiat 500 flew off dealer lots in March, giving carmakers their best monthly sales in almost five years.
Larger vehicles sold well, too, offering more evidence of growing confidence in the economic recovery. Small businesses, farmers, and others took advantage of big promotions to buy pickups.
In all, Americans bought 1.4 million cars and trucks in March, up 13 percent from the same month a year earlier - the most sold since August 2007, Edmunds.com said.
General Motors, Chrysler, and Toyota all reported double-digit gains over March 2011. Nissan and Hyundai set company records. Only Honda Motor Co. reported a decline.
If car sales stay at the same rate as in March, they would end the year at 14.4 million, up from 12.8 million in 2011. While that’s still below the 17 million of the booming mid-2000s, it’s far higher than during the industry’s downturn in 2009, when 10.6 million vehicles were sold.
Jesse Toprak, vice president at TrueCar.com, expects continued strong sales this year, thanks to new products, higher consumer confidence, and low interest rates. “The good news is that the recovery has legs,’’ he said. He expects total sales of 14.5 million in 2012.
That would be a faster pace than many were predicting at the start of the year. As recently as October, J.D. Power and Associates lowered its 2012 forecast from 14.1 million vehicles to 13.8 million because of economic uncertainty.
The auto sector’s recovery is helping the entire economy.
“Auto is important because it creates so many other jobs,’’ said Sung Won Sohn, an economics professor at California State University.
Sohn said a lot of pent-up demand remains from people who couldn’t afford cars during the recession. The average vehicle age on US roads has reached 10.8 years.
Sohn said high gas prices are helping to persuade people to trade in older, less-efficient vehicles.
TrueCar said the average vehicle price reached a record of $30,748 in March, $2,000 more than in the same month last year. Even though drivers are switching to smaller cars, they’re appointing them with expensive luxuries.
GM said its US sales rose 12 percent, but car sales were up 62 percent because of new models including the Chevrolet Sonic subcompact and Buick Verano compact.
Chrysler Group’s sales jumped 34 percent. One standout was the Fiat 500.
Toyota Motor Corp. said sales were up 15 percent. Sales of the Prius hybrid jumped 54 percent for the month.
Ford Motor Co. reported its best March since 2007. Sales were up 5 percent as demand for the Focus small car rose 65 percent. But sales of the Fiesta subcompact fell 34 percent as buyers flocked to the newer Focus.
Honda sales fell 5 percent, but that compared with a particularly strong month in 2011. Buyers raced to get Hondas last year because of fears - later realized - that the March earthquake and tsunami would disrupt supplies.
Nissan Motor Co. said sales were up 12.5 percent, making it the best month in Nissan history.
Volkswagen AG sales rose 35 percent.
Hyundai Motor Co. said its sales rose 13 percent.