DETROIT — The auto industry looks set to ride the appeal of smaller cars to its best monthly performance in almost four years.
General Motors said Tuesday that its U.S. sales rose 12 percent in March on solid demand for cars and small crossovers that achieve at least 30 miles per gallon on the highway. Chrysler's sales jumped 34 percent as buyers went for Fiat small cars and Chrysler sedans. Sales at Ford rose 5 percent as sales of the Focus small car rose sharply compared with a year ago.
Americans who couldn't bear a new car payment 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 subcompacts such as the Honda Fit to save money. Also, incentives on trucks are good enough to lure buyers who want something bigger.
The consulting firm LMC Automotive predicts 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 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.
For Chrysler, it was the best month for the company in four years, while Ford had its best March performance since 2007. Nissan reported all-time record sales.
Compact and subcompact models combined are expected to account for 23 percent of retail sales for March, LMC said.
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.
Ford says sales of the F-Series pickup, which is the best-selling vehicle in the U.S., rose 9 percent. Truck sales are up as small businesses and construction crews continue to grow more confident about the economic recovery.
March also saw more growth in loans to subprime buyers. Jefferies analyst Peter Nesvold wrote in a note to investors that nonprime 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.
AutoNation, the Fort Lauderdale auto retailer, said Tuesday that its sale rose 15 percent in March, mostly on the strength of Detroit brands, which were up 26 percent.