DETROIT -- U.S. sales of sport-utility vehicles and pickup trucks jumped in March, spurred by rising home prices and an increase in housing construction, major automakers said on Tuesday.
In March, new light-vehicle sales rose 3.4 percent and the annual sales pace reached 15.27 million, in line with analyst expectations. This marked the fifth straight month the industry sales rate topped 15 million.
General Motors Co. (GM) said the stronger housing market helped its sales to small businesses rise nearly a third. Ford Motor Co. (F), the No. 2 U.S. automaker, posted a 16.3 percent rise in sales of its F-Series pickup trucks.
"The housing sector recovery is in full swing," Ford senior U.S. economist Jenny Lin told reporters and analysts.
The U.S. housing sector is starting to contribute to growth after years of dragging down the broader economy. Rising home values are helping U.S. consumers feel more confident about buying a new vehicle, GM and Ford executives said.
Home prices in 20 metropolitan areas rose 8.1 percent in January from a year earlier, the biggest 12-month rise since June 2006. Meanwhile, U.S. home builders are breaking ground on more new houses this year, boosting truck sales.
In about a month, GM will launch redesigned Chevrolet Silverado and GMC Sierra big pickups as 2014 models. Ford is planning an overhaul of its F-150 next year.
Pent-up demand and a wider range of financing options have also helped boost sales, executives said. The average age of vehicles on U.S. roads is more than 11 years, an all-time high, and many consumers can no longer put off buying a replacement.
"You're not only having better traffic level, you're also having better success with so many people who got hit on their credit scores during the recession," Al Castignetti, U.S. sales chief for the Nissan brand, said in an interview.
"That's opening up a whole new segment that was kind of locked out of the auto industry the last couple of years."
A 'Tricky' Recovery
Auto sales each month are an early indicator of economic health. The auto industry is in the midst of its fourth year of recovery from an economic downturn that pushed GM and Chrysler into bankruptcy in 2009.
GM sold 245,950 vehicles in March, up 6.4 percent from a year earlier but falling short of at least three estimates. Ford sales rose 5.7 percent to a stronger-than-anticipated 236,160 vehicles, making March its best month since May 2007.
GM also posted a 31 percent sales gain in crossovers vehicles, such as the Chevrolet Traverse. Ford posted a 15.4 percent spike in sales of SUVs, such as the Escape.
Toyota Motor Corp. (TM) posted a 1 percent rise in U.S. sales to 205,342 vehicles. Chrysler Group LLC, the third-largest U.S. automaker, rose 5 percent to 171,606, its best month since December 2007.
"If I had to sum up the month in one word, it would be 'Wow'," Toyota's head of U.S. auto operations Bob Carter said.
In a surprise development, the Nissan Altima eked past the Toyota Camry to be the best-selling U.S. mid-size sedan in March. The difference between the two models was exactly 100 cars.
Carter acknowledged that Toyota hasn't redesigned the Camry as recently as other rivals. But he said the Camry remains on track to be the top-selling car in this bread-and-butter segment for the thirteenth straight year.
The U.S. auto market is among the strongest in the world and is increasingly critical for major automakers as car sales in European tumble. Sales in Spain, for example, fell 13.9 percent in March, figures released on Tuesday showed.
GM stuck to its forecast for U.S. industry sales as high as 15.5 million this year, which would be the best year since 2007, before the U.S. economy slid into recession.
The industry's swift recovery over the last few years has allowed the sector to be a bright spot during an uncertain economic recovery. But TrueCar.com analyst Jesse Toprak said those outsized gains would be difficult to maintain.
"After this year, it's going to become a bit tricky," he said. "Getting to 15.5 [million] is not going to be as tough as getting to 16.5 [million]. Getting there may take another couple of years."