Carmakers report strong June sales in U.S.
A shopper checks out a Fiat in a North Miami showroom on Tuesday. Fiat has a big stake in Chrysler, which reported its best June sales in five years. Volkswagen is on track for it best U.S. year since ’73. (July 3, 2012) Credit: Getty Images
From mini cars to monster pickups, sales of new cars and trucks surged in June and eased concerns that Americans would be turned off by slower hiring and other scary headlines.
Automakers sold nearly 1.3 million cars and trucks in June, up 22 percent from the same month last year. Chrysler posted its best June in five years. Sales soared at Volkswagen, which is on track for its best year in the United States since 1973.
The results allayed fears that the car market's momentum had stalled. U.S. sales were on track to reach 14.5 million after the first four months of the year.
The annual pace dropped to 13.8 million in May, as the stock market plunged and hiring slowed. June brought worrisome news about jobs growth and consumer confidence.
But buyers didn't go away last month. In fact, June's annual sales pace rose to 14.1 million, according to Autodata Corp. If sales stay at that level for all of 2012, it will be the industry's best year since 2007.
Falling gas prices, cheaper loans and new models like the Ford Escape and Dodge Dart drew buyers. A revived housing market lifted sales of pickups. And there was still plenty of demand from people who bought cars in the middle of the last decade and needed to replace them. Annual sales hit a high of 17 million in 2005, and those cars and trucks are now seven years old.
If a family's "only mode of transportation is on the fritz, they are going to buy a replacement vehicle, even if Spain's economy is on the brink of collapse," said Alec Gutierrez, a senior market analyst at Kelley Blue Book.
Automakers also started their Independence Day promotions a little early, and that juiced sales at the end of the month. Colorful ads with holiday deals excited buyers, said Jessica Caldwell, a senior analyst with pricing site Edmunds.com.
Low interest rates on loans are making deals more attractive. The average interest rate on a 60-month new-car loan is 4.5 percent, down from 6.98 percent two years ago, according to Bankrate.com. Credit availability is also improving.
