Auto sales make gains in March

Auto sales in March rose significantly from a year ago and from a month before, thanks to fears of vehicle shortages in Japan and other factors. According to a report from Edmunds.com, March auto sales were expected to rise 16.5 percent from last year and 25 percent from the month of February, with more people getting auto industry financing. One of the most popular types of cars being sold were small vehicles such as the Ford Fiesta and the Honda Civic, which experts said was due to higher fuel prices. Other industry groups said that they predicted almost one-quarter of cars sold would be small cars. According to a report from J.D. Power and Associates, the share of compact cars for the month of March would likely account for 20.4 percent, higher than 17 percent the month before. John Humphrey, senior vice president of automotive operations at J.D. Power and Associates, said the auto sector is far more prepared to handle unforeseen issues than it was prior to the downturn in the economy. "The economy is no longer the primary variable that could impact the total year sales volume, as the industry is now grappling with gas prices at their highest level in more than two years, as well as the potential for widespread shortages in vehicle availability," said Humphrey in a statement. "While risks remain evident, the industry's condition is much stronger and able to weather external shocks better than it could before the recession." Experts at J.D. Power were optimistic about 2011 when it came to overall auto sales. The group increased its current forecasts to 10.6 million in retail automobile sales, higher than the 16 percent increase it experienced in 2010. The industry has come a long way from January 2009, when the U.S. government spent billions to help the U.S. auto industry avoid collapse. And while it was controversial at the time, according to a recent report by the Congressional Oversight Panel, the bailout of the auto industry by the U.S. federal government was far less expensive than the Wall Street bailout, and was vital to saving the sector. Despite its ability to rescue it for the time being, the COP was unsure whether the bailout would help the industry for decades to come. "The domestic automotive industry was trending downward before the financial crisis hit and it is unclear whether the (bailout) will ultimately reverse that trend in the long term," the panel said in its report.