Image: Chevrolet Cruze vehicles are displayed at courtesy Chevrolet dealership in Phoenix
JOSHUA LOTT  /  Reuters
Chevrolet Cruze vehicles are displayed at Courtesy Chevrolet dealership in Phoenix on Jan. 4.
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updated 4/1/2011 6:17:17 PM ET 2011-04-01T22:17:17

Americans slipped into smaller cars and SUVs in March, as higher gas prices made fuel efficiency a top priority and rising employment meant more first-time buyers bought a vehicle.

The trends lifted U.S. sales of new vehicles by 17 percent from a year earlier to 1.25 million, a healthy rate that shows the auto industry's slow and steady recovery remains on track. The monthly sales pace, adjusted for seasonal differences and projected out for the year, came in at 13.1 million. During recent boom years, car sales hit 16 million a year.

The March 11 earthquake in Japan had little impact on sales, although automakers said supplies could be tighter as spring progresses.

General Motors, Ford, Honda and Nissan all saw double-digit increases in sales. Of major automakers, only Toyota reported a decline of 6 percent, but that was expected since Toyota's sales last March were boosted by big incentives.

Ford sold more new vehicles than General Motors last month, making March only the second time the company has outsold GM since 1998.

Story: GM rebates, CEO comments raise eyebrows

As gas prices rose, sales of more efficient cars and crossovers took off. The national average for a gallon of gas hit $3.58 this week, the highest price ever for this time of year. Gas prices have jumped 25.1 cents per gallon in the past month.

"This is a new normal we're going to experience going into spring this year unless gas prices ease off dramatically," said Jesse Toprak, vice president for industry trends at auto pricing site TrueCar.com.

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Sales of the Nissan Sentra compact car doubled over last year, for example, while sales of the Hyundai Sonata and Elantra small cars were up a combined 55 percent. Fuel-efficient crossovers did well, too. Ford Escape sales climbed 25 percent.

But Toprak said gas prices weren't the whole story. Buyers always respond to new products, and it just happens that many of those products — like the Ford Fiesta subcompact and Chevrolet Cruze small car — are also the most fuel-efficient.

A healthier economy also gave buyers more confidence to walk into showrooms and walk out with a new ride. The economy added 216,000 new jobs in March, bringing the unemployment rate to a two-year low of 8.8 percent. Many of those workers are young people who were looking for work during the recession but now have jobs and are looking to buy a car. And the cars they want are under $20,000 and fuel-efficient, Toprak said.

Larger cars, crossovers and SUVs are most hurt by the trend. Buyers seem to be moving down one vehicle size when they make a new purchase. Sales of the Chevrolet Traverse, a large crossover, fell 4.7 percent in March, while sales of the mid-size Chevrolet Equinox crossover were up 17 percent. Sales of the Ford Taurus large sedan were down 15 percent, but the Ford Fusion midsize sedan saw its best sales month ever.

Pickup sales were down slightly, and pickup buyers seemed to be looking for more efficiency. Ford said 37 percent of F-150 buyers opted for Ford's new V-6 engine in March instead of the traditional V-8.

In the past, that might have been a concern for automakers, who get heftier profit margins on larger vehicles. But Alan Batey, vice president of GM's Chevrolet division, said buyers are equipping their small cars with more expensive options like leather seats, which drives up the prices. Just 20 percent of buyers are opting for a base model Cruze, he said.

GM said its overall sales increase of 11 percent was propelled by the new Cruze, its first high-quality small car in years. The vehicle posted an 80 percent sales gain over its lackluster predecessor, the Cobalt. The increase was by far the largest for any GM vehicle last month.

But GM ended two months of sweet deals and its overall sales growth lagged rivals. After raising discounts by about $400 per vehicle in January and extended them into February, GM then cut them in March.

Ford Motor Co.'s sales were up 16 percent on the strength of new vehicles including the new Explorer crossover, which saw sales double from last March.

Chrysler Group LLC said its 31 percent sales increase was led by midsize sedans such as the Chrysler 200, which was featured in a popular Super Bowl ad, and the Dodge Avenger. Sales growth for cars outpaced trucks, but truck sales still were strong at Chrysler.

Toyota attributed its sales drop to reduced rebates. TrueCar.com said Toyota's incentives fell 23 percent from last March and 11 percent from February. Officials tried to reassure customers that it will have adequate supplies of the Prius, which saw sales jump 52 percent in March. Production has resumed in Japan and shipments will be arriving soon, they said.

"We don't envision we're going to be running out of that car," said Bob Carter, head of the Toyota division at the company's U.S. branch.

Toyota Motor Co. is starting April with an 18-day supply of Japan-made Prius hybrids, down from a 30-day supply at the beginning of March.

Other automakers reporting sales Friday included:

  • Kia Motors America, with a 44 percent increase from March of last year. Sales of the new Optima midsize car were up 90 percent.
  • Honda Motor Co. said sales jumped 23 percent. The subcompact Fit, which is made in Japan, led the way with a 49 percent increase, while Civic compact sales rose more than 40 percent.
  • Nissan Motor Co. said sales jumped 27 percent for the month, the best month in the company's history. Sales of the Sentra compact more than doubled, but sales of the Pathfinder SUV were also strong, bucking the small-car trend.
  • Hyundai Motor America reported a 32 percent sales jump and said sales of the Elantra compact more than doubled.
  • Subaru of America Inc. said U.S. sales rose 13 percent. Outback sales jumped 38 percent.
  • Mazda North American Operations said its U.S. sales rose 33 percent. Sales of the Mazda5 minivan more than doubled.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explainer: What’s old is new again: Muscle is back

  • GM  /  Wieck

    What’s old is new again.

    The year 1969 seems to be in the air in Detroit these days, as crosstown rivals Ford and Chevrolet have revived respected high-performance versions of their popular pony cars that originally debuted the same year Neil Armstrong and Buzz Aldrin landed on the moon.

    There are other revival cars out there too, though they may have been here for a couple years already.

    Here’s a look at the old and new versions of Detroit’s well-loved muscle cars.

  • OLD: 1969 Ford Mustang Boss 302

    Ford

    In the late 1960s Ford sought to shore up the Mustang against its rivals in the Sports Car Club of America’s Trans-American sedan racing series, known as Trans-Am. The result was the Boss 302, a model sold in 1969 and 1970 for the sole purpose of bringing a high-powered, sharp-handling Mustang to showrooms that could win on the racetrack. Stiff springs, adjustable shocks, fatter tires and a high-revving engine delivered the goods. Ford sold 8,641 Boss 302 Mustangs during the two years it was produced, making it one of the most collectable versions of the car. Advertised horsepower was 290 hp, with the 302 cubic inch (5.0-liter in modern terminology) backed by a four-speed manual transmission.

  • NEW: 2012 Ford Mustang Boss 302

    Ford  /  Wieck

    Today’s Boss 302 was built with a new mission: defeat the fearsome BMW M3 on the racetrack. Ford execs vowed to approve the project only if the resulting Mustang could lap circuits like Mazda Raceway Laguna Seca faster than the Bavarian rival.

    As they had 42 years earlier, Ford engineers braced the chassis, stiffened the springs and reworked the engine to rev faster than ever. The new 302 V8 is rated at 444 hp. And again the result is a stunningly fast car considering some of the proletarian underpinnings, such as the solid rear axle.

    A test driver for Motor Trend magazine posted a Laguna Seca lap time in the car that was a slim 0.01 seconds slower than that of the exotic Audi R8 V10 by rival Road & Track magazine. The Boss is faster than the Nissan GT-R, Audi R8 4.2 (the V8 version of the car), Chevrolet Corvette Z06, BMW M3 and Porsche Cayman S.

  • OLD: 1969 Chevrolet Camaro ZL1

    GM

    Ford wasn’t the only one with a track-centric pony car that debuted in 1969. Chevrolet rolled out the Camaro ZL1 the same year.

    This car was more the result of ingenuity than planned intent. Unlike the Boss, the ZL1 wasn’t designed by anyone to do anything. Instead, it was the result of a creative Illinois Chevrolet dealer who ordered 50 Camaros equipped with the company’s aluminum block 427 cubic-inch racing engine code-named ZL1.

    A few other dealers caught on to the idea and 69 of the cars were built with then engine which was officially rated at 430 horsepower, but which was tested to produce more than 500 hp.

    The $4,200 racing engine doubled the price of the Camaro, so they weren’t terribly popular with regular customers, but drag racers appreciated the car’s ability to rocket down the strip in just 11 seconds.

  • NEW: 2012 Chevrolet Camaro ZL1

    GM  /  Wieck

    The new Camaro ZL1 will hit showrooms early next year, and like the new Boss 302, it packs even more power than the original, even taking the fudge factor on the old car’s rating into account.

    The 2012 Camaro ZL1 uses a supercharger to produce at least 550 hp (the official number hasn’t been finalized yet). The 6.2-liter V8 and six-speed manual transmission are similar to those seen on the Corvette ZR1 and Cadillac CTS-V, and the adjustable magnetic ride shock absorber technology also carries over from the Corvette.

    The result is the most technologically advanced Camaro ever, and while the company hasn’t announced a specific performance target, it is safe to assume that Chevy’s engineering team would very much like to unseat the Boss 302’s lap times at the track.

  • OLD: 1963 Chevrolet Corvette Z06

    GM

    In the early 1960s, American car makers had agreed not to officially back racing with “factory” teams. But the companies had customers who still wanted to race their cars, and so they wanted for those teams to win.

    Sports car racing teams wanted the fastest possible Corvette to challenge Ferrari and Carroll Sheby’s Cobras, and Chevrolet obliged by offering Regular Production Option code Z06 for the Corvette. Checking that option on the ‘Vette’s order sheet caused the factory to install a 360-hp 327 cubic-inch V8, M21 four-speed manual transmission, stiffer springs, shocks and swaybars, racing-grade drum brakes (the Corvette didn’t yet have disc brakes), aluminum wheels and a huge 36.5-gallon gas tank for endurance races.

    At $5,975, Chevy found just 199 customers for the Z06 in 1963.

  • NEW: 2011 Chevrolet Corvette Z06

    GM  /  Wieck

    By 2001, Chevrolet was ready to roll out a higher-performing version of the Corvette to defend the car’s reputation against the Dodge Viper, which had claimed the performance high ground. The company reached into its archives and dusted off the Z06 moniker. That meant the usual steps of installing a more powerful engine and stiffening the suspension to upgrade track performance, while leaving the base model with its softer springs and available automatic transmission for the boulevard cruisers.

    Today Chevrolet still offers the Corvette Z06, though its position as the pinnacle of Corvette performance has since been superseded by the supercharged Corvette ZR1. So the 2011 Z06 is the top-performing normally aspirated Corvette model, with a 427 cubic-inch V8 (7.0-liters) cranking out 505 hp, propelling the car to a top speed of 198 mph. Widespread use of lightweight carbon fiber and magnesium whittles the Z06’s mass to 3,175 lbs. a total that is unheard-of among today’s crop of porky performance models. If that’s not enough, an available performance package brings the wheels, tires, shocks and brakes from the ZR1 for maximum handling and braking.

  • OLD: 1968 Dodge Charger R/T

    Dodge

    Dodge debuted the fastback-styled intermediate-sized Charger in 1966, using a design originally planned for Chrysler’s turbine car, which did not reach production. But a refreshed design in 1968 tripled Charger sales, and along with the new sheetmetal came a new high-performance option, the R/T, which stood for Road/Track.

    The R/T’s base engine was the 375-hp 440 Magnum, but the optional 425-hp 426 Hemi with two four-barrel carburetors was the legendary pinnacle of the line, with a top speed of 156 mph, according to a test of the car by Car and Driver magazine.

    With modest changes the following year, the 1969 Charger gained later fame in garish citric paint as the street-going racecar “General Lee” on the popular weekly 1980s television drama “The Dukes of Hazard.”

  • NEW: 2011 Dodge Charger R/T

    OWEN  /  Dodge

    To the widespread dismay of enthusiasts, when the Dodge Charger returned to the company’s lineup, it was not as a swoopy coupe, but as a pug-faced four-door sedan. Dodge assuaged the ruffled feathers with an R/T model meant to confirm the Charger’s faithfulness to the original in terms of performance, if not appearance.

    For 2011 the Charger R/T is powered by a 370-hp 5.7-liter Hemi V8 that, in a nod to modern realities, switches to a fuel-saving four-cylinder mode when all those horses aren’t needed. Another modern reality is customer disinterest in manual transmissions, so in a divergence from the original as shocking as the new car’s blocky styling, there is no manual transmission available.

    But there is all-wheel-drive, giving snow-plagued drivers their first realistic opportunity to own a normally rear-drive American muscle car as a year-round daily driver. And for those who feel today’s R/T is lacking in power compared to the original, there is always the 425-hp 6.1-liter SRT8 version.

  • OLD: 1970 Dodge Challenger R/T

    Dodge

    The midsized Charger was a good muscle car, but was too big to be a natural competitor to Ford and Chevy’s Mustang and Camaro “pony” cars, so in 1970 Dodge launched the smaller Challenger to take them on. As with the Charger, an R/T high-performance model led the way.

    In addition to the Charger R/T’s two engines the 1970 Challenger added a third option: a 390-hp version of the 440 Magnum engine topped by three two-barrel carburetors in place of the single four-barrel on the 375-hp engine.

    The Challenger survived in this form only until 1974, but its legend was strong enough to spawn a new Challenger modeled after the original in 2008.

  • NEW: 2011 Dodge Challenger R/T

    Bill Delaney  /  Dodge

    The 2011 Challenger R/T is a stirring tribute to the original car, mimicking its styling cues. Gearheads will appreciate that Dodge stuck to the original’s attitude in making a six-speed manual transmission available to go with the 376-hp 6.2-liter Hemi V8 engine, though there is also an automatic transmission available.

    Even with the ability to rocket to 60 mph from a standstill in less than six seconds, the Hemi-powered Challenger scores 25 mpg on the EPA’s highway fuel economy test thanks to cylinder deactivation technology that lets it cruise on four cylinders.

    But if passing competitors is more important than passing gas pumps, a new top-of-the-line Challenger SRT8 392 Hemi edition offers a stunning 470 hp that brings 60 mph on the speedometer in less than five seconds.

Video: Confidence and Car Sales

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