Chrysler US sales rise 12 percent in August - KMSP-TV

Chrysler US sales rise 12 percent in August

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By TOM KRISHER
AP Auto Writer

DETROIT (AP) -- Chrysler's U.S. sales rose 12 percent last month as strong truck sales pushed the company to its best August in six years.

The automaker sold nearly 166,000 cars and trucks last month. Sales of its best-selling Ram pickup rose 31percent.

Chrysler predicts that total U.S. sales will run at an annual rate of 16.1 million, a pace last seen before the Great Recession. Industry analysts say August could be the best month since May of 2007, when $3 a gallon gasoline set off panic buying of fuel-thrifty vehicles.

All major automakers report sales numbers Wednesday.

Chrysler sold more than 33,000 Ram pickups, the model's best August since 2006. Jeep brand sales rose 8 percent for the brand's best August in 11 years. Grand Cherokee SUV sales were up 40 percent. All five of Chrysler's brands reported sales increases as the company recorded its 41st straight month of year-over-year sales gains.

Sales of truck-based vehicles were extremely strong for Chrysler at more than 120,000. That's nearly three times the company's car sales and may indicate that Chrysler is once again becoming overly reliant on trucks for its profits. That led to problems four years ago when the company nearly ran out of cash and was forced into a government-funded bankruptcy.

LMC Automotive, an industry consulting firm, is predicting that total U.S. sales last month were close to 1.5 million, about 12 percent higher than a year ago and the highest monthly total in more than six years.

This time, small cars aren't the only big sellers. Analysts say people are buying everything from tiny Honda Fits to big pickup trucks as an improving economy keeps pushing auto sales higher.

Some consumers still find gas prices steep enough that they're buying small cars. Plus, these vehicles are nicer than they were six years ago, far quieter and safer with more features, said Tom Libby, lead North American analyst for the Polk automotive research firm. In fact, compact and subcompact cars could challenge midsize cars as the largest segment in the U.S., according to analysts from Kelley Blue Book.

Still, gas prices aren't the catalyst they were back in 2007 and 2008. In fact, gas this August was the cheapest in three years, averaging $3.57 a gallon, compared with $3.62 in 2011 and $3.69 last year.

In May of 2007, automakers sold more than 1.56 million cars and trucks, due largely to a boom in small cars as the nationwide average for gas topped $3 a gallon for the first time. That helped the Japanese automakers. Sales of Toyota's Prius gas-electric hybrid, which then got 46 miles per gallon in city and highway driving, nearly tripled.

But last month, Toyota had to discount the Prius to boost sales. Toyota discounted the average Prius by $1,462, more than triple the incentives from a year ago, according to TrueCar.com, an auto pricing website.

"Consumers like stability," said Jeff Schuster, senior vice president of sales forecasting for LMC. Now that they're used to higher gas prices, "it's less of a shock than in May of 2007," he said.

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