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Auto sales up with economy, but buyers downsize

DETROIT — Americans bought smaller cars and SUVs in March, as higher gas prices made fuel efficiency a top priority and rising employment meant more first-time buyers bought a vehicle.

The trends lifted U.S. sales of new vehicles by 17 percent from a year earlier to 1.25 million, a healthy rate that shows the auto industry's slow and steady recovery remains on track. The monthly sales pace, adjusted for seasonal differences and projected out for the year, came in at 13.1 million. — higher than last year but still far below recent boom years when car sales hit 16 million a year.

The earthquake and tsunami in Japan last month had little impact on sales, although automakers said supplies of some cars could be tighter further into spring.

General Motors, Ford (which outsold GM in the United States last month for only the second time since 1998), Honda and Nissan all saw double-digit increases in sales. Of major automakers, only Toyota reported a decline of 6 percent, but that was expected since its sales last March were boosted by big incentives.

As gas prices rose, sales of more efficient cars and crossovers took off. The national average for a gallon of gas hit $3.58 this week, the highest price ever for this time of year. Gas prices have jumped 25.1 cents per gallon in the past month.

Sales of the Nissan Sentra compact car doubled over last year, while sales of the Hyundai Sonata and Elantra small cars rose a combined 55 percent. Fuel-efficient crossovers like the Ford Escape did well, too. Crossovers are sport-utility vehicles built on car underpinnings so they're more efficient and maneuverable than truck-based SUVs.

But Jesse Toprak, vice president for industry trends at auto pricing site truecar.com, said gas prices weren't the whole story. Buyers respond to new products, and many of those products — like the Ford Fiesta subcompact and Chevrolet Cruze small car — are also the most fuel-efficient.

A healthier economy also gave buyers the confidence to walk into showrooms and walk out with a new ride. The economy added 216,000 jobs in March, bringing the unemployment rate to a two-year low of 8.8 percent. Many of those workers are young people who were looking for work during the recession but now have jobs. The cars they want are under $20,000 and fuel-efficient, he said.

Larger cars, crossovers and SUVs are most hurt by the trend. Buyers seem to be moving down one vehicle size when they make a new purchase. Pickup sales were down slightly.

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Other automakers reporting sales Friday included:

• Kia Motors America, with a 44 percent increase from March of last year. The Optima midsize car saw a 90 percent sales increase.

• Honda Motor Co. sales jumped 23 percent to 133,650 vehicles on sales of models with good gas mileage. The subcompact Fit led the way with a 49 percent increase, while Civic compact sales rose more than 40 percent.

• Nissan Motor Co. sales jumped 27 percent for the month, the best month in the company's history. Sales of the Sentra compact more than doubled.

• Hyundai Motor America reported a 32 percent sales jump. Sales of the Elantra compact more than doubled.

Auto sales up with economy, but buyers downsize 04/01/11 [Last modified: Friday, April 1, 2011 11:01pm]
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