Ford, Chrysler US sales up in March; analysts expect best month since May 2007
March was the best sales month for Ford and Chrysler in nearly six years, as buyers armed with tax refund checks were lured by flashy new vehicles and low interest rates.
Ford's sales were up 6 percent and Chrysler's rose 5 percent compared with last March. It was the best month for Ford since May 2007 and the best for Chrysler since December 2007, the same month the Great Recession began.
General Motors said sales rose 6 percent last month, while Toyota sales inched up 1 percent compared with a very strong March a year earlier.
Industry analysts estimate that total March sales reached nearly 1.5 million cars and trucks, a number not seen since May 2007. Total U.S. sales are expected to be up 3 to 5 percent over March of 2012. All automakers report U.S. sales through the day on Tuesday.
The strong numbers are another sign that Americans are buying cars in increasing numbers as their financial situation improves.
Alec Gutierrez, a senior market analyst with Kelley Blue Book, said the improving job market is boosting sales. The number of Americans seeking unemployment benefits fell to a five-year low during March. Low interest rates are also making new-car purchases more appealing, Gutierrez said. The average rate for a 60-month new-car loan is now 4.12 percent, down from 4.52 percent at this time last year, according to Bankrate.com.
And Gutierrez says tax refunds may have also spurred purchases. The average federal tax refund this year is nearly $3,000, or enough to cover the down payment on a three-year lease of a Toyota Camry hybrid or a BMW 3-Series sedan.
Chrysler said it sold almost 172,000 cars and trucks in March, led by the Ram pickup with an increase of 25 percent. Pickup truck sales are recovering from a five-year slump as businesses start to replace older work trucks. Full-size pickup truck sales are expected to show a nearly 15 percent increase for March, following big gains in February, the car pricing company Kelley Blue Book said.
Aging cars also are driving sales. The average vehicle in the U.S. is more than 11 years old because people held on to their cars and trucks due to economic uncertainty.
Sales of the Dodge brand, led by the Avenger midsize car, rose 15 percent from a year ago. But Jeep brand sales, which have led the company for several years, fell 13 percent. Even the Grand Cherokee SUV, which has boosted Chrysler sales for months, fell 10 percent.
Ford's sales were boosted by the newly redesigned Fusion sedan and Escape SUV, which both saw record monthly sales. Sales of the F-Series pickup — the nation's best-selling vehicle — were up 16 percent to 67,513 as contractors and other small businesses buy new trucks at a rapid pace. But sales of Ford's luxury Lincoln brand dropped 23 percent as shipments of the new MKZ sedan were delayed.
Incentive deals -- such as the $7,500 cash back offered for the Chevrolet Silverado pickup — are helping truck sales. General Motors, Ford and Chrysler each have a healthy supply of trucks for sale and GM wants to clear out older models before introducing its new Chevrolet Silverado in a few months.
Crossovers are also gaining, thanks to redesigned models like the Escape and Toyota RAV4. Small car sales are down slightly, in part because gas prices are relatively low. Gas averaged $3.64 per gallon at the end of March, down from $3.78 at the end of February and $3.91 in March of 2012, according to AAA.
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