Chrysler's U.S. sales rose 20 percent in June on strong demand across its lineup, from the tiny Fiat 500 to the Ram pickup truck.
The automaker's sales increase last month was in line with expectations for overall industry growth of about 20 percent over last June. Sales were weaker last year because the Japanese earthquake depleted supplies. Other automakers report sales later Tuesday.
Demand for Chrysler's Ram pickup -- its best-seller -- increased 12 percent as home building perked up. Cars saw much bigger increases. Sales of the Fiat 500 and the Chrysler 300 large sedan more than doubled over last June.
The pace of U.S. sales is cooling somewhat from the start of the year. Earlier this spring, sales were on track to reach 14.5 million this year. The pace dropped to 13.8 million in May and is expected to stay below 14 million in June.
But so far, carmakers aren't panicking.
They say underlying demand remains strong, and new models like the Ford Escape and Dodge Dart -- which both arrived in dealerships last month -- will draw out buyers. Chrysler sold 200 Darts last month.
"Although this softer sales rate may persist over the next few months, we believe that 2012, like 2011, will finish out strongly," Barclays analyst Brian Johnson wrote in a recent note to investors.
Sales in the first four months of this year were boosted by mild weather and the post-earthquake return of Japanese inventories. But since then, the economic picture has gotten cloudier. In June, employers scaled back hiring and manufacturing shrank for the first time in nearly three years. Consumer confidence -- which needs to be strong for buyers to invest in new cars -- fell for the fourth straight month.
The news isn't all worrisome. If sales come in at 13.8 million for the year, they would still be stronger than the 12.8 million in 2011. And they'd be much stronger than the 30-year low of 10.4 million during the recession in 2009.
There continues to be a lot of demand from buyers who bought cars in the middle of the last decade and need to replace them. Annual sales hit a high of 17 million in 2005, and those cars are now seven years old.
Low interest rates and better credit availability could also lure buyers. The average interest rate on a 60-month new-car loan is now 4.5 percent, down from 6.98 percent two years ago, according to Bankrate.com.
"The affordability of cars is probably at an all-time high," Chrysler Group sales chief Reid Bigland said last week.