Chrysler had strong retail sales to individual buyers during the month, particularly in pickups and SUVs, said Reid Bigland, the company's U.S. sales chief. It was Chrysler's 40th straight month of year-over-year sales growth.
Chrysler is predicting that industry sales in July will run at an annual rate of 15.8 million vehicles.
"We're almost at a pre-recession pace that looks like it may have the momentum that will carry it through the second half of the year and beyond," said Alec Gutierrez, senior market analyst for Kelley Blue Book.
The consulting firm LMC Automotive said the second-half tail wind could push this year's sales to around 16 million. Sales last topped 16 million in 2007, just ahead off the recession. They bottomed out at a 30-year low of 10.4 million in 2009, and have been recovering ever since.
A combination of low interest rates, an improving economy, rising consumer confidence and increasing home values in many areas is driving sales. In addition, automakers have been rolling out appealing new products in every segment from subcompact cars to big pickup trucks.
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Sales of pickup trucks are especially strong, which helps the Detroit automakers. Sales of compact and subcompact cars as well as compact crossover SUVs are expected to also show healthy gains, Gutierrez said. Total pickup truck sales could rise as much as 30 percent in July, he said. Edmunds.com says last month may have been the strongest July in seven years.
Incentives are helping sales. Rebates and low-interest loans in July rose nearly 8 percent over a year ago to $2,684 per vehicle. That's the highest level of the year, said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.
Overall, though, the discounts haven't cut prices. The average sale price of a vehicle last month held steady at just over $31,000, Toprak said. That's because buyers are loading up on options, which boosts the price, he said. To get lower monthly payments with a higher price, buyers are stretching out their loans and leasing more vehicles, according to LMC.
Thirty percent of car loans now are six years or longer, up from 29 percent in the first half of last year. Leasing, which generally lowers monthly payments, accounts for 24 percent of auto sales, up from 21 percent a year ago, LMC said.
At Chrysler, sales of the Jeep Compass and Patriot small SUVs were each up close to 30 percent as well. But some of the company's other models in key segments saw sales declines, including the Chrysler 200 midsize car, which was down 13 percent.