Detroit gets a lift from robust pickup sales
Strong results for March were helped in part by a recovering housing industry and its need for new trucks.
The auto industry would love more months like March. It was the best month for auto sales in the U.S. since 2007 -- thanks in part to a pickup in the sale of pickup trucks. General Motors (GM), Ford (F) and Chrysler sold nearly 155,000 pickups in the month, a jump of 14% from March 2012, the Associated Press reported.
The New York Times quoted industry statistics that say overall, 1.45 million vehicles were sold in March, a 3.4% rise over the same time last year.
"Even though consumer confidence has been up and down this year, there are 'wealth effects' that are making Americans feel comfortable finally buying new cars they've been waiting for," Lacey Plache, an economist with Edmunds.com, told the newspaper.
Sales were good for all of the Detroit Three carmakers. GM reported a 6.4% increase in new vehicle sales for March. Ford showed a 5.7% rise compared to March of 2012, marking its best monthly performance since May of 2007.
Chrysler, which owned by Italy's Fiat (FIATY), had a 5% improvement in sales last month. And Fox Business says that rise was due to strong U.S. demand for Fiats -- as well as Ram pickup trucks. In fact, Rams set an all-time sales record in March, soaring 25%.
Industry officials point to the reviving U.S. housing market as helping to lift pickup truck sales as construction companies and contractors find more work. Housing starts rose 0.8% in February, compared to a month earlier and were up nearly 28% compared to February of 2012.
"Housing is good," Kurt McNeil, GM's vice president of U.S. sales said in an interview with the Los Angeles Times. "And the individuals that make their living as a result of that are buying trucks."
But it's not just construction types that are breaking open the piggy bank for a new set of wheels.
"Now homeowners feel comfortable doing repairs and renovations, and the tradespeople have enough business to start replacing vehicles," Jesse Toprak, an analyst with TrueCar.com, told the LA Times.
And there's optimism that the March figures are just a start. Edmunds.com recently raised its 2013 auto sales forecast to 15.5 million vehicles. The group notes that negatives like domestic fiscal issues and the European debt crisis continue to weigh on consumers. But it balances those negatives against positives -- like historically low interest rates, more home mortgage refinancing, pent-up buyer demand, a record stock market and a stronger jobs market.
All these factors are apparently freeing up funds for American car and truck buyers.
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[BRIEFING.COM] The major averages capped a solid week with a broad advance. The S&P 500 added 0.5%, extending its weekly gain to 2.7%.
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