Associated Press

DETROIT (AP) -- With gas prices near $4 per gallon, smaller cars like the Ford Focus, Nissan Versa and Fiat 500 flew off dealer lots in March and gave the U.S. auto industry its best monthly sales in almost four years.

But in a measure of Americans' growing confidence in the recovery, larger vehicles sold well, too. Small businesses, farmers and others snapped up pickups in March, a month when automakers typically offer big promotions. Chrysler said sales of its Ram brand were up 18 percent, while Ford's F-Series pickup -- the best-selling vehicle in the U.S. -- was up 9 percent. Small SUVs like the Chevrolet Equinox and Jeep Grand Cherokee also saw big increases.

"One would think there would be more of an extreme reaction of consumers to gas prices, that really hasn't happened," said Jesse Toprak, vice president of industry analysis at auto site "We see a balanced reaction from consumers."

General Motors, Chrysler, Toyota and Nissan all saw double-digit gains over last March. Only Honda Motor Co. reported a decline, with sales down 5 percent from a particularly strong March in 2011. Buyers raced to get Hondas last year because of fears that the March earthquake and tsunami would disrupt supplies.

The consulting firm LMC Automotive predicts U.S. sales of new cars and trucks reached 1.37 million last month, up 6 percent from March of 2011 and the highest number since May of 2008. Industry analysts say sales could run at an annual rate of 14.1 million to 14.5 million vehicles, continuing the strong performance in January and February.

That's a faster recovery than many had predicted. Last October, for example, J.D. Power and Associates lowered its 2012 forecast from 14.1 million vehicles to 13.8 million because of continuing economic uncertainty. The company raised that forecast to 14.0 million in February.

Toprak expects sales to progress at the 14.5-million rate for the rest of this year. Compelling new products, improvements in consumer confidence and the stock market and low interest rates should all continue to boost sales. Americans bought 12.8 million cars and trucks in 2011.

The auto sector's recovery is helping the entire economy.

"Auto is important because it creates so many other jobs," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University. "Think about the things that go into an auto. Glass, textiles, rubber. There's a lot of financing activity. We are talking about a very significant portion of job creation, so that's very important."

Sohn said a lot of pent-up demand remains in the U.S. with the average age of a vehicle on U.S. roads at 10.8 years, and he says high gas prices are actually helping convince people to swap out older, less-efficient vehicles. Pent-up demand, from people who couldn't buy cars during the recession or who waited for Japanese inventories to recover from the earthquake, will continue to fuel sales well into next year, said GM's U.S. sales chief Don Johnson.

GM said Tuesday that its U.S. sales rose 12 percent compared to last March. Small car sales were up a combined 62 percent thanks to new models like the Chevrolet Sonic subcompact and Buick Verano compact. Sales of the Chevrolet Cruze small car were up 20 percent.

Chrysler Group's sales jumped 34 percent. Chrysler said Fiat 500 sales hit 3,712, compared to just 500 last March when the subcompact was first on the market. Sales of Chrysler's 200 and 300 sedans each doubled over last March. The Jeep Grand Cherokee SUV also jumped 43 percent.

Toyota Motor Corp. said sales were up 15 percent, with sales of the Prius hybrid climbing 54 percent for the month. Sales of the Camry midsize sedan, which was updated last fall, rose 35 percent.

Ford Motor Co. reported its best March since 2007. Sales were up 5 percent as demand for the Focus small car rose 65 percent. But that came at a price. Sales of the Fiesta subcompact fell 34 percent as buyers flocked to the newer and bigger Focus.

High prices don't seem to be holding buyers back. TrueCar said the average vehicle price reached a new record of $30,748 in March, around $2,000 more than the same month last year. Toprak said people are moving into smaller cars but are appointing them with luxuries like leather seats and navigation systems that drive up the price.

AutoNation, the Fort Lauderdale, Florida, auto retailer, said Tuesday its sale rose 15 percent in March, mostly on the strength of Detroit brands, which were up 26 percent.

Other automakers reporting Tuesday:

-- Nissan Motor Co. said sales were up 12.5 percent to 136,317, making it the best month in Nissan's history. Sales of the new Versa small car rose 41 percent, while Altima midsize sedan sales were up 27 percent. Nissan's numbers got a boost from higher than usual incentives, which estimated rose 28 percent to $3,115 per vehicle. Nissan is trying to sell off its remaining Altima sedans before a new Altima goes on sale in July. Industry incentives averaged $2,440 per vehicle.

-- Volkswagen AG said its sales rose 35 percent to 36,588, the company's best March sales since 1973. Volkswagen saw big gains with the new Passat sedan and the new Beetle.


AP Auto Writer Tom Krisher contributed to this report from New York.

Copyright 2012 The Associated Press.

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