Chrysler's U.S. sales rose 20 per cent in June on strong demand across its lineup, from the tiny Fiat 500 to the Ram pickup truck.

The automaker's increase was in line with expectations for overall industry growth in June.

Even though the pace of sales has cooled from earlier this year, auto companies and analysts say underlying demand remains strong. And new models like the Ford Escape and Dodge Dart, which both arrived in dealerships last month, will draw out buyers.

Demand for Chrysler's Ram pickup, its bestseller, increased 12 per cent as home building perked up. Cars saw even bigger increases. Sales of the Fiat 500 and the Chrysler 300 large sedan more than doubled from a year ago. And Chrysler sold 200 compact Darts last month.

Earlier this spring, sales were on track to reach 14.5 million this year. The pace dropped to 13.8 million in May and most analysts expected it to stay below 14 million in June.

But so far, carmakers aren't panicking. Chrysler, which had its best June since before the recession in 2007, predicted a rate of 14.4 million for June.

"Although this softer sales rate may persist over the next few months, we believe that 2012, like 2011, will finish out strongly," Barclays analyst Brian Johnson wrote in a recent note to investors.

Sales in the first four months of this year were boosted by mild weather and the post-earthquake return of Japanese inventories. But since then, the economic picture has gotten cloudier. In June, employers scaled back hiring and manufacturing shrank for the first time in nearly three years. Consumer confidence, which needs to be strong for buyers to invest in new cars, fell for the fourth straight month.

The news isn't all worrisome. If sales come in at 13.8 million for the year, they would still be stronger than the 12.8 million in 2011. And they'd be much stronger than the 30-year low of 10.4 million during the recession in 2009.