Chevrolet Malibus on display at a car dealership in Peoria, Ill. March car… (Bloomberg )
Consumers flocked to car dealerships last month as they scrambled to replace gas-guzzling vehicles with more efficient cars, encouraged by a strengthening economy.
“The combination of credit availability, an improving economy, pent-up demand and even high fuel prices encouraging people to acquire newer, more fuel-efficient vehicles are all helping to drive industry sales,” said Reid Bigland, Chrysler’s U.S. sales chief.
Chrysler Group said its U.S. sales rose 34% in March to 163,381 vehicles compared with the same month a year ago. It was Chrysler’s best monthly sales in four years.
Analysts believe that by the time all the automakers report Tuesday, the industry will have logged sales of about 1.5-million cars in March, more than it has in any month since 2007.
That’s prompted auto analyst Jesse Toprak of TrueCar.com to raise his annual sales forecast to 14.5-million vehicles, which would make 2012 the best year since 2007, when Americans purchased 16.3-million autos.
An improving job market and the rally on Wall Street are providing buy signs for consumers, he said.
“Look at the stock market. There is a strong correlation between the Dow Jones industrial average and car sales. It is like a green light for car purchases,” Toprak said.
Easier credit is helping people to purchase cars.
Hyundai Motor America, for example, said it is seeing a return of buyers using home equity to help finance purchases, a financial strategy that fell off when real estate prices crashed during the recent recession.
General Motors Co. said its March sales rose 12% to 231,052 vehicles.
Ford Motor Co. said it logged its best March U.S. sales month since 2007. Sales rose 5% to 223,418 vehicles in March. Its results were boosted by large sales to rental car companies and other fleet customers.
Like other manufacturers, Ford's gains were helped by strong sales of passenger cars. Its Fusion family sedan, which is about to be replaced with a newly designed version of the car, had its best month ever, selling nearly 29,000 units.
Volkswagen said it sold 36,588 vehicles in March, a 35% increase over the same month a year earlier and VW’s best March since 1973.
“This shows the potential of growing consumer confidence,” said Jonathan Browning, chief executive of Volkswagen Group of America.
But Browning said the torrid sales pace the industry is experiencing now could slow the rate of sales growth in the second half of this year.
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