Surging truck sales paved the way for one of the biggest auto sales months in nearly six years.
That’s a sign of the housing rebound making its way into new construction, as contractors buy new pickups. Growth in the vital housing and auto industries are giving a welcome boost to the broader economy.
“Housing is good,” said Kurt McNeil, vice president of U.S. sales at General Motors Co. “And the individuals that make their living as a result of that are buying trucks.”
February housing starts rose almost 28% from a year earlier to a seasonally adjusted annual rate of 917,000. New-home sales fell last month because the supply is tight, with only about 41/2 months’ worth of inventory on the market. That should spur more building.
“It’s very important, mainly because construction spending has lagged compared to previous economic recoveries, and it is now beginning to become more positive,” said Gerd-Ulf Krueger, a principal at HousingEcon.com Inc.
An improving housing market also boosts household wealth, enabling people to purchase big-ticket items such as cars.
“Stronger home sales and stronger house price appreciation means that household wealth is rising,” said Celia Chen, an economist with Moody’s Analytics. “And that is a positive for the broader economy.”
It’s not just new-home construction fueling truck sales.
“Now homeowners feel comfortable doing repairs and renovations, and the trades people have enough business to start replacing vehicles,” said Jesse Toprak, an analyst with auto price information company TrueCar.com.
Growth in the energy sector also is powering truck sales, said Jenny Lin, senior economist at Ford Motor Co.
Ford saw F-Series pickup sales soar 16% to 67,513 last month. That was almost double the number for the Nissan Altima, the best-selling passenger car in March.
Sales of Chrysler Group’s Ram trucks and Toyota’s smaller Tacoma trucks jumped 25% and 21%, respectively, over the same month last year. Chevrolet Silverado pickup sales rose 8%.
Sales of trucks from all manufacturers grew 9% last month compared with a year earlier, while car sales fell 1%, Autodata Corp. reported.
Toprak noted that strong truck sales during the first quarter of the year — usually the worst for construction because of the weather — is unusual. The last quarter typically has the most truck sales, as companies make equipment investment decisions based on their profits and expected tax bill.
Overall, the industry sold almost 1.5 million cars and trucks in March, 3.4% more than a year earlier, according to Autodata Corp. It was the most since August 2007, according to automotive information company Kelley Blue Book.
Brett Hoselton, an analyst with KeyBanc Capital Markets, pointed to a “confluence of favorable indicators” behind the auto sales gains this year, including low cost and widespread credit, people replacing aging cars and the strength in the housing market.
GM’s U.S. sales rose more than 6% in March to 245,950 vehicles compared with a year earlier, according to Autodata. Ford sold 235,643 vehicles last month, a 6% increase. Chrysler Group sold 171,606 vehicles, a 5% increase and its best monthly sales result since December 2007.
Toyota Motor Corp. reported monthly U.S. sales of 205,342 vehicles, up 1%.
“A strong first-quarter close and increased consumer confidence continue to position the auto industry as a leader in the economic recovery,” said Bob Carter, senior vice president of automotive operations at Toyota Motor Sales USA Inc.
Honda Motor Co. reported U.S. sales in March of 136,038 vehicles, a 7% increase. Lead by its Altima family sedan, Nissan’s sales totaled 137,726 vehicles — the best-ever month in the U.S. for the automaker and a 1% increase.
Even with these gains, the auto industry is still not back to pre-recession levels, when it regularly sold 16 million to 17 million vehicles annually.
“But the industry is getting closer to a full recovery every month,” said Jessica Caldwell, an analyst at Edmunds.com.
Times staff writer Alejandro Lazo contributed to this report.