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US auto sales surge on truck and SUV demand

The logo on the front of a Dodge RAM truck is seen at a Chrysler dealership in Carlsbad, California April 29, 2013.
The logo on the front of a Dodge RAM truck is seen at a Chrysler dealership in Carlsbad, California April 29, 2013.MIKE BLAKE / Reuters

Detroit's Big Three automakers posted higher sales last month amid rising demand for larger vehicles such as SUVs and pickup trucks.

Strong demand for the Ram pickup helped drive Chrysler's sales up 11 percent last month as the company posted its best April in six years. General Motors Co.'s U.S. sales rose 11 percent in April on continuing demand for pickups as well as small cars. And Ford Motor Co. said its U.S. sales rose 18 percent in April thanks to big demand for the recently redesigned Escape SUV.

The increase is another sign that Americans continue to buy cars and trucks despite high unemployment and mixed economic signals.

Among Japanese makers, Toyota said its April sales slipped 1.1 percent, missing analysts' expectations. Nissan sales rose 23 percent.

But U.S. automakers led the way in April sales.

Chrysler said it sold 156,698 cars and trucks last month, led by the Ram pickup with sales of 31,409. The Jeep Grand Cherokee SUV also posted strong numbers, with sales up 27 percent to just over 15,000. Dodge brand sales rose 18 percent, with the Dart compact car posting its best month ever with sales of nearly 8,100. But the Chrysler brand of vehicles struggled in April, with sales falling 13 percent.

Truck and SUV sales helped the Chrysler company post its big increase. The company's truck sales rose 14 percent, while car sales rose only 5 percent.

Chrysler predicted that total U.S. sales will hit an annual rate of 15.4 million in April. That's a little higher than most analysts' predictions. It's likely to be the sixth straight month of sales above a 15 million yearly pace.

Sales of the Ford Escape rose 52 percent to nearly 26,000. It was the best April for the Escape since the vehicle first went on sale 13 years ago.

Ford's luxury Lincoln brand also showed signs of a turnaround after years of declining sales. Sales of the new Lincoln MKZ sedan, which reached many U.S. showrooms in April, more than doubled over last year. Lincoln sales rose 21 percent for the month.

Sales of Ford's F-Series pickup, the best-selling vehicle in the U.S., rose 24 percent over last April, with continuing demand from home builders and other businesses. Ford sold more than 59,000 F-Series pickups in the U.S. last month.

At GM, sales of the Chevrolet Silverado full-size pickup rose 28 percent to more than 39,000. Truck sales have been strong all year on rising demand from home builders and other businesses.

GM also saw double-digit increases for its small cars, including the Buick Verano, the Chevrolet Cruze and the Chevrolet Sonic.

All of GM's four brands saw higher sales than last April. Cadillac sales rose 34 percent as the new ATS and XTS hit the market, while Buick and Chevrolet were both up 11 percent.

Barring an unexpected event that causes a real estate price collapse or rapidly rising job losses, there's little to stop sales from growing further in the next few years, industry analysts say.

"I don't see any significant hurdles on the horizon," said Alec Gutierrez, a senior market analyst at Kelley Blue Book. "I don't see us taking a step back, provided the unemployment rate at least holds steady."

U.S. unemployment stands at a stubbornly high 7.6 percent, but that hasn't slowed auto sales much.

Aside from unemployment, almost every factor that affects car and truck sales is positive. Interest rates are low — the average four-year loan on a new car is 2.4 percent, according to Bankrate.com. Also, credit is widely available, even to those with low scores. Used-car values are high, so car buyers can get good money when they trade in their old cars. Lease deals are good. Gas prices have fallen since February.

In addition, home-building is on the rise, up 7 percent from February to March. That usually means better sales of big pickup trucks as companies and laborers return to the market. Kelley Blue Book expects big pickup sales to rise more than 26 percent in April, as compared to a year ago.

Many businesses and consumers need to replace older trucks and cars. The average age of a U.S. vehicle is 11.2 years. Plus, automakers have rolled out dozens of exciting new models in the past year, drawing buyers into showrooms.

"Relatively lower gas prices coupled with small business demand improving for trucks resulted in a strong showing for small and large pickups in April," said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.

One category that's soaring is small crossover SUVs. Sales are expected to rise 22.5 percent, according to Kelley Blue Book. Fuel-efficient models such as the Ford Escape, Honda CR-V and Mazda CX-5 are driving sales up, Gutierrez said.

Kelley Blue Book estimates that auto prices fell slightly in April compared with a year ago, to an average of $31,326.

Although the year is turning out to be strong for auto sales, Gutierrez said not to expect the double-digit growth rates of the past two years. He expects U.S. auto sales to end the year around 15.3 million cars and trucks, up 5.5 percent from last year's 14.5 million.

The Associated Press and Reuters contributed to this report.