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Carmakers report strong June sales after May slowdown

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From mini cars to monster pickups, sales of vehicles charged higher in June and eased concerns that Americans would be turned off by slower hiring and other scary headlines.

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 job 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.

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  • Actually
    While I agree with Pat that Mitt Romney and other Investment Bankers, drove small and mid-size companies out of business as they milked every penny from the firms they invested in, there are several others to thank for the latest round of profits for auto makers. The Federal Reserve kept loan rates low, so the auto companies could offer very low rates. Fuel costs have dropped, so truck and SUV sales came back. Vehicles that provide higher MPG have really helped. Labor rates, the one item that auto manufacturers always fought, are 30%-40% lower than 2007, helped along by givebacks from unions and/or right to work states. I will not vote for Mitt Romney because of Bain Capital's driven desire to squeeze blood from a rock. Anyone who was either starting, or working in a turn-around company that Bain was involved in, will find it hard to vote for Romney. I believe folks in the South refer to Romney as the "Carpetbagger" but our employs who lost their jobs to overseas production companies used different words. If you want a real taste of reality, watch as Labor Unions in China push back and demand higher wages and improved benefits for company workers. It sort of reminds me of the 50's and 60's, when our Middle Class drove the economic growth of the United States. Instead of crying "Be American - But American" folks should be screaming "Bring My Job Home".
  • Sorry, Mitt
    Good news for America and Americans. Bad news for offshore vultures like Romney.

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  1. I am a Lyft driver who is a licensed CDL professional driver. ALL Lyft drivers take pride in providing quality service to the Indianapolis and surrounding areas, and we take the safety of our passengers and the public seriously.(passengers are required to put seat belts on when they get in our cars) We do go through background checks, driving records are checked as are the personal cars we drive, (these are OUR private cars we use) Unlike taxi cabs and their drivers Lyft (and yes Uber) provide passengers with a clean car inside and out, a friendly and courteous driver, and who is dressed appropriately and is groomed appropriately. I go so far as to offer mints, candy and/or small bottle of water to the my customers. It's a mutual respect between driver and passenger. With Best Regards

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  3. In the first sentance "As a resident of one of these new Carmel Apartments the issue the local governments need to discuss are build quality & price." need a way to edit

  4. As a resident of one of these new Carmel Apartments the issue the local governments need to discuss is build quality & price. First none of these places is worth $1100 for a one bedroom. Downtown Carmel or Keystone at the Crossing in Indy. It doesn't matter. All require you to get in your car to get just about anywhere you need to go. I'm in one of the Carmel apartments now where after just 2.5 short years one of the kitchen cabinet doors is crooked and lawn and property maintenance seems to be lacking my old Indianapolis apartment which cost $300 less. This is one of the new star apartments. As they keep building throughout the area "deals" will start popping up creating shoppers. If your property is falling apart after year 3 what will it look like after year 5 or 10??? Why would one stay here if they could move to a new Broad Ripple in 2 to 3 years or another part of the Far Northside?? The complexes aren't going to let the "poor" move in without local permission so that's not that problem, but it the occupancy rate drops suddenly because the "Young" people moved back to Indy then look out.

  5. Why are you so concerned about Ace hardware? I don't understand why anyone goes there! Every time ive gone in the past, they don't have what I need and I end up going to the big box stores. I understand the service aspect and that they try to be helpful but if they are going to survive I think they might need to carry more specialty parts.

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