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GM Sales Rise 10 Percent As Gas Prices Fall

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(Photo by Bill Pugliano/Getty Images)

(Photo by Bill Pugliano/Getty Images)

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DETROIT (AP) — Falling gas prices brought truck buyers back to General Motors showrooms last month. Still, pump prices remained high enough that shoppers snapped up smaller cars as well.

GM sales rose 10 percent in June from a year ago. The Detroit car company said it sold 215,000 cars and trucks last month, up from 194,828 a year ago. The result indicates the auto industry’s slow recovery from the recession is back on track after a brief slump in May.

GM said that cheaper gas lured more pickup truck buyers with Chevrolet Silverado sales rising 5 percent and GMC Sierra sales up 8 percent compared with a year earlier. Any jump in pickup sales helps GM and other Detroit automakers, which sell more than five times as many pickups as foreign-based brands.

Still, GM’s sales were led by smaller, more fuel-efficient models like the new Chevrolet Cruze compact. Gas prices averaged $3.68 per gallon in June. That’s cheaper than the average for May, but hardly cheap. Sales of the Cruze more than doubled the sales of the car it replaced, the lackluster Chevrolet Cobalt.

GM’s small-car and crossover sales also got a boost from earthquake-related shortages of Japanese models that persisted through June.

GM is the first major car company to report U.S. sales on Wednesday. Earlier, Volkswagen of America Inc. said its U.S. sales rose 35 percent in June on strong demand for its Jetta midsize sedan and other models. Industry analysts expect overall U.S. sales to rise 13.5 percent from last June.

Even with sales rebounding in June, GM backed off a bit from its sales forecast for the year. Don Johnson, vice president of U.S. sales, said he now expects the total sales to be at the low end of the company’s previous prediction of 13 million to 13.5 million vehicles.

Johnson blamed the change on stubbornly high unemployment, which contributed to the decline in May. Total U.S. sales fell 3.7 percent in May after a string of double-digit monthly increases.

Johnson sees the slow recovery continuing through the rest of the year. He said that even with unemployment around 9 percent, 91 percent of the country is still working, and many are driving older cars.

“There are still people out there looking for a vehicle and in many cases need to replace their vehicles,” Johnson said.

The average car on the road now is 10.6 years old, according to the Polk research firm.

Automakers expect to sell around 1.1 million cars and trucks in June. That’s up 5 percent from May, when parts shortages caused by the March earthquake in Japan, $4-per-gallon gas and a lack of deals caused a slump.

But the pace of sales has slowed from the beginning of this year. Like GM, some analysts are starting to question the strength of the recovery. J.D. Power and Associates lowered its full-year sales forecast from 13 million vehicles to 12.9 million, saying the sluggish economy could take a bite out of sales even if car shortages ease by this fall.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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