March Auto Sales Rise on Penny-Pinching Small Cars

Spring has sprung for U.S. auto sales, and it continues to create a fresh-smelling outlook: Sales in March were up by about 13 percent compared with a year ago, and most prognosticators now are looking for a strong second quarter as well.

Concerns loom about the second half, including how rising gas prices eventually might wear down a strengthening U.S. economy, and the wild card that election season always brings. But for now, auto-brand executives and analysts are crediting a brightening economy, easing credit, and even warmer-than-expected spring weather for a buying mood among American consumers.

The biggest driver: higher gasoline prices — for now, at least — are spurring purchases of more fuel-efficient compact cars. "Everyone, regardless of segment, places fuel economy top of mind, today," said Ken Czubay, Ford's vice president of U.S. sales, on a conference call today.

Consider Ford's own best-selling brand: F Series trucks. Sales overall were up by 9 percent in March compared with a year ago, and Czubay attributed the gain in part to the continued strong growth in demand by buyers of the F-150 for the two new six-cylinder engines that Ford recently made available, including an EcoBoost version. Last month, 56 percent of F-150s sold at retail were equipped with one of the engines. "Pickup-truck buyers are saying thaty want fuel economy but they can't sacrifice performance," he said.

Meanwhile, Toyota saw sales of its Prius vehicle line hit a sales record for any month. One reason was that Toyota introduced two new Prius versions — the larger v and the smaller c — last month. "For the most part, these are bringing new buyers into the Prius family," said Jeff Bracken, Toyota Division vice president.

Prius v attracted buyers "who hadn't previously considered a hybrid because they needed more flexibility and versatility." And Prius c, with a sticker price that starts under $19,000, "is opening up hybrid technology to a whole new arena of buyers for us" who may have been thwarted by the huge price premiums for the original Prius.

Even the much-maligned Chevrolet Volt — a mileage champion, of course — picked itself up during March, posting sales of 2,259 for the month -- nearly 300 percent higher than the level in January, when news-media reports savaged the car after a federal investigation of post-crash fires in the car. It was by far Volt's best sales month ever and could inject some life back into a proposition that lately has been much more about politics than about the product.

"We almost effectively had to relaunch the vehicle," Alan Batey, vice president of sales for Chevrolet, told brandchannel. New testimonial-type TV ads for Volt were one part of that effort, and the enthusiasm of a handful of Chevy dealers around the country for the wonders of Volt helped generate some new sales momentum. "We knew [the March numbers] would be good, and that shows what happens when you get some momentum."