Traverse City Record-Eagle

Business

June 29, 2012

Chrysler exec predicts stronger sales in second half

Bigland expects a rebound after slower May, June

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CHELSEA (AP) — Chrysler's top sales executive says U.S. auto sales will slow a bit in June from the pace earlier this year, but he expects a rebound in the second half of 2012.

At a media event Thursday, Reid Bigland, head of sales for Chrysler and CEO of the Dodge brand, also said he expected a strong June for his company, with an increase of around 18 percent as long as Chrysler does well in the final days of the month. All automakers report June U.S. sales on July 3.

Auto sales have been a bright spot in the economy. They were running at an annual pace of around 14.5 million from January through April. But in May, the rate slowed to 13.8 million, which companies and analysts blamed on a slight rise in unemployment, stock market gyrations and falling consumer confidence. Many analysts predict that June sales will come in at an annual pace below 14 million for the second-straight month.

Bigland said the warm weather earlier in the year might have pulled ahead buyers who would have shopped in May or June. Even though the pace may be slowing a bit from earlier in the year, overall sales should post a strong gain over June of 2011.

He based his second-half prediction on several trends. Auto loan interest rates are historically low. There's wider loan availability, even for people with poor credit. Lower gas prices mean people feel a bit wealthier. And there's pent-up demand because the average vehicle on U.S. roads is almost 11 years old and many need to be replaced.

Low interest rates are helping keep car payments down, and that's spurring sales, Bigland said.

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