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Incentives help lift GM, Ford sales in March

Sales of General Motors Co. cars and trucks rose 21 percent last month compared with a dismal March last year, a sign that U.S. auto sales are benefiting from an incentive war.
Image: GM Plant Readies For Third Shift As U.S. Sales Increase In February
The GM plant in Lansing, Mich., has more than 3,000 workers on two shifts and is expected to add a third shift of 900-1,000 workers in April. The plant produces the Buick Enclave, Chevrolet Traverse, and GMC Acadia crossover SUVs.  Bill Pugliano / Getty Images
/ Source: The Associated Press

Car shoppers flocked to showrooms last month, lured by big promotions from Toyota and other automakers that could persist into the spring.

Toyota's unprecedented incentives, including low-interest financing, cheap leases and free maintenance for return customers, pushed up its U.S. sales 41 percent in March and helped it recover from a dismal February. They also touched off an incentive war that drew in buyers to rival dealers.

General Motors Co. reported a 21 percent jump in new vehicles sales on Thursday, while Ford's climbed nearly 40 percent and Honda Motor Co. rose 23 percent over March last year.

The sales point to one conclusion: March was a good time to buy a new car.

The 2010 New York International Auto Show
Getty Images North America

Slideshow  27 photos

The 2010 New York International Auto Show

Cool concept cars and some slick, and green, vehicles are on display at the 2010 New York International Auto Show.

Automakers ramped up promotions, with incentive spending up $100, or 4 percent, from February to $2,742 per vehicle, according to Edmunds.com. That's still down from a record high of $3,165 last March, when dealers scrambled to lure customers worried about rising layoffs and bankruptcies at GM and Chrysler.

Toyota rolled out the incentives in early March to counter safety recalls that have tarnished its image of quality and reliability. The recalls, which began in October and grew in later months, include more than 8 million cars and trucks around the world due mainly to reports of unintended acceleration. The company blames gas pedals that stick or become trapped under floor mats. Repairs have been made to millions of the recalled vehicles.

Company sales fell 9 percent in February, before it launched its aggressive promotions. The broader industry's sales climbed 13 percent that month.

Toyota's deals are scheduled to end April 5 but the Japanese automaker says some of them may continue beyond that date.

GM's sales from its four core brands — Buick, GMC, Chevrolet and Cadillac — rose 43 percent to 188,546. Redesigned vehicles like the Chevrolet Equinox midsize crossover and Buick LaCrosse luxury sedan saw strong demand. Sales fell sharply for Saturn, Pontiac and Hummer, the brands it is shedding.

Industry analysis firms TrueCar and Edmunds.com predicted that GM's March incentive spending would lead major automakers at more than $3,500 per vehicle, well above the industry average of roughly $2,800.

March auto sales shouldn't be viewed as a sign of economic recovery because automakers had to shell out a lot of money to draw in customers, said Jessica Caldwell, analyst for Edmunds.

"I still don't see a huge, steady demand," she said.

Other sales results include:

  • Chrysler Group LLC continued to struggle, with sales down 8 percent.
  • Hyundai's sales rose 15 percent, propelled by sharply higher demand for its newly released Sonata sedan and its Tucson small SUV.
  • Nissan Motor Co. sales were up just over 43 percent, while Subaru sales climbed 46 percent.