Automakers reported big gains over June of last year. Chrysler posted its best June in five years. Sales surged at Volkswagen, which is on track for its best year in the U.S. since 1973.
The results allayed fears that growth would stall after a strong start to 2012. Earlier this spring, sales were on track to reach 14.5 million this year, boosted by mild weather and the post-earthquake return of Japanese inventories. But the pace dropped to 13.8 million in May, as the stock market plunged and hiring slowed. In June, there was more bad news about jobs growth, and consumer confidence fell for the fourth straight month.
But buyers didn't go away. Falling gas prices, cheaper loans and new models like the Ford Escape and Dodge Dart drew them out. A revived housing market lifted sales of pickups.
By early Tuesday, The Detroit Three all said they expected the sales rate to top 14 million.
"Despite a rising level of uncertainty with the economic recovery, consumers remain resilient in their willingness to purchase new vehicles," said Jeff Schuster, LMC's senior vice president of forecasting at LMC Automotive. Shuster is still expecting 2012 sales of 14.5 million.
For Chrysler, sales of the tiny Fiat 500 and Chrysler 300 large sedan more than doubled from a year earlier. General Motors' sales rose 16 percent, helped by strong demand for the Chevy Malibu and Volt electric car.
Pickup truck sales grew stronger as home building perked up. Chrysler's Ram pickup sales rose 12 percent and sales of the Ford F-Series - which has long been the country's best-selling vehicle - rose 11 percent.
Ford's overall sales rose 7 percent. The Escape small SUV posted its best month ever - rising 28 percent - after a new version of the popular vehicle arrived at dealerships. Ford said 40 percent of Escapes sold were new models, while the rest were heavily discounted older versions. Sales of the Ford Explorer SUV were also up 35 percent.
Shares of GM and Ford, which investors have beaten down lately over losses in Europe, rose Tuesday. Ford's stock climbed 3.3 percent to $9.71, while GM's stock jumped 6.5 percent to $20.84.
Toyota Motor Corp. said its sales were up 60 percent for the month, but that wasn't surprising. Last year, Toyota and Honda had little inventory at U.S. dealerships because of the earthquake in Japan.
Japanese automakers are taking back sales that its rivals gained last year. The Chevrolet Cruze, for example, was the top-selling car in the country last June, but its sales were down 24 percent last month.
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 are also luring 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.
Even 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.
Other automakers reporting Tuesday:
- Nissan Motor Co. said its sales were up 28 percent. Nissan's Infiniti luxury brand was up 66 percent thanks to the new Infiniti JX crossover.
- Volkswagen's sales rose 34 percent on strong demand for two recently redesigned cars: the Beetle and the Passat. Volkswagen is on track to have its best year in the U.S. since 1973 thanks to a cheaper, revamped lineup.