MEXICO CITY - Mexican auto sales rose 36.7 percent in June, bringing the industry to a 38.1 percent gain in the first half of the year.
The pace exceeds the 30 percent gain that industry leaders expected six months ago.
Every automaker posted gains for the month. Among the biggest makers, Chrysler had the largest increase. Its sales rose 56.6 percent for the month.
Chrysler has been hurt by the lack of a small car. But in June, Chrysler began offering a new incentive program, which included 0 percent interest on loans paid back within 18 months. Chrysler's car sales more than doubled for the month.
Thanks to a strong May and June, Chrysler's sales for 1997 have pushed ahead of last year's pace, by 4.8 percent.
Volkswagen sales rose only 2.8 percent in June. They were slowed by a 31.4 percent plunge in Beetle sales. VW remains in fifth place, more than 25,000 units behind leader General Motors.
GM sold 53,216 units in the first six months. Its gains for June and the first half were nearly the same - about 41 percent.
Production in June rose 1.0 percent, and the industry is ahead 3.8 percent for the first six months, at 636,812 units.
In June, output for exports fell 11.1 percent from the year-ago month. Production for the local market, meanwhile, gained 63.0 percent. Still, Mexican factories have built three times as many vehicles for export this year as they have for the home market.
Mexico's June sales increase came as the country focused on a historic election.
Cuauhtemoc Cardenas, a populist who redefined himself as a moderate, will be the first elected mayor of Mexico City. He is a member of the opposition Party of the Democratic Revolution, or PRD. The election also eroded the lock on Congress enjoyed by the ruling Institutional Revolutionary Party, or PRI.
The post-election hope: a multiparty Congress will yield a higher standard of living. That can help the auto industry by providing stable sales growth, revised tax policies, more investment and less crime.
Harley Shaiken, a labor professor at the University of California, Berkeley, predicted that the election will bring a more stable economy and a strong climate for foreign investments. 'The people's enormous dissatisfaction with the PRI has already been shown at the elections,' he said. 'Now growth and continuity can be expected.'
Mike Wijers, a spokesman for Volkswagen de Mexico, said: 'The elections were positive. We hope democracy will be reflected in how the auto industry is seen by the government.'