Chrysler reports best sales year since 2007

DETROIT Chrysler's U.S. sales jumped 21 percent last year, the carmaker's strongest performance since 2007.

The company's impressive increase outpaced the U.S. auto industry, which is expected to post a 13 percent gain for 2012. Chrysler's sales were a strong sign that Americans felt more confident about the economy as they replaced aging cars and trucks last year.

"The U.S. light vehicle sales market continues to be a bright spot in the tremulous global environment," said Jeff Schuster, senior vice president of forecasting for LMC Automotive, a Detroit-area industry forecasting firm.

For December, Chrysler's sales rose 10 percent to 152,367 cars and trucks, led by the Jeep Grand Cherokee SUV, Ram pickup and Chrysler 300 luxury car. Chrysler, the first automaker to report sales on Thursday, said industry sales jumped to an annual rate of 15.8 million in December, making it the strongest month of the year.

The robust sales came even with uncertainty about the so-called fiscal cliff -- the automatic tax hikes and spending cuts that would have slowed the U.S. economy.

Sales of new cars and trucks for the year should total around 14.5 million. That is almost 40 percent higher than 2009, when the economy tanked and sales hit their lowest level in nearly three decades.

Last year U.S. unemployment eased, the housing industry started to recover and people felt a bit more confident in the economy. Interest rates also stayed low and banks made loans available to more customers, even those with lousy credit. People began to replace the aging cars and trucks that they'd owned since before the recession. The average age of a vehicle in the U.S. grew to a record 11.2 years.

In 2012, sales of Japanese brand cars rebounded in the U.S. Customers could choose from more Honda and Toyota models because the companies recovered from a 2011 earthquake and had enough vehicles stocked at dealerships for nearly the whole year.

Honda was expected to lead all manufacturers in December with a 32 percent rise in sales from a year earlier. Volkswagen also was expected to post big numbers, up 29 percent, according to the TrueCar.com auto pricing website. General Motors' sales were forecast to rise just 1 percent, lagging industry growth as they have for most of the year.

December featured year-end deals on big pickup trucks; GM offered discounts of up to $9,000 to help clear growing inventory.

Overall, though, analysts said the industry eased up on promotions such as rebates and low-interest financing. Car and truck buyers paid an average of $31,228 per vehicle last month, up 1.8 percent from December 2011.

The Polk auto research firm predicted even stronger U.S. sales for 2013, forecasting 15.3 million as the economy continues to improve. Polk, based in Southfield, Mich., expects 43 new models to be introduced, up 50 percent from last year. New models usually boost sales.

The firm also predicts a rebound in sales of large pickups and midsize cars. All eight of the top manufacturers are strong and introducing new vehicles, and that should bring competition and lower prices in those segments, according to Tom Libby, lead North American analyst for Polk.

But the firm's optimistic forecasts hinge on Washington reaching an agreement on government debt limits and spending cuts.