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posted: 4/2/2010 12:01 AM

GM, Toyota, Ford gain on incentives in 'rough' market

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  • Toyota 2010 RAV4 sports utility vehicles sit in a long row at a Toyota dealership. Toyota said Thursday that U.S. sales in March surged 41 percent based on unprecedented incentives.

    Toyota 2010 RAV4 sports utility vehicles sit in a long row at a Toyota dealership. Toyota said Thursday that U.S. sales in March surged 41 percent based on unprecedented incentives.
    Associated Press


General Motors Co., Toyota Motor Corp. and Ford Motor Co. posted U.S. sales gains in March as industrywide incentives and improving consumer confidence brought buyers back to showrooms.

GM deliveries rose 21 percent to 188,546 to overtake Ford, which had grabbed the top spot in the U.S. in February for the first time since 1998. Ford said Thursday that sales jumped 40 percent to 183,783, while Toyota reported a 41 percent increase to 186,863.

"There's still a question of how strong is the underlying retail demand," said Michelle Krebs, an analyst at researcher "As the month wore on, the sales pace dropped and at the end of the month. it was pretty weak. Sales were driven by deals, but these deals only go so far."

Industrywide sales may have run at the fastest pace since 2009's "Cash for Clunkers" rebates, even with GM, Ford and Chrysler Group LLC all missing analysts' estimates. Honda Motor Co. and Nissan Motor Co. both reported gains. Toyota's incentives to counter global recalls of more than 8 million vehicles spurred rivals to match the offers.

"It's still a rough market out there," said Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Massachusetts.

The seasonally adjusted annual sales rate for cars and light trucks probably reached 12 million, the average of eight analysts' estimates compiled by Bloomberg.

That would be a fifth straight advance from a year earlier and make March the best month since September 2008, excluding August 2009, when the clunkers program ended, according to data compiled by Bloomberg. Manufacturers, dealers and investors use the annualized rate to compare monthly totals by accounting for seasonal buying patterns. The March 2009 pace was 9.86 million.

Ford expects a March sales rate for the industry of about 12 million vehicles, and a "modest recovery" for 2010, George Pipas, the company's sales analyst, said on a conference call.

GM retained the Chevrolet, Cadillac, Buick and GMC brands as part of the Detroit-based automaker's government-backed bankruptcy, and is selling or closing Saab, Hummer, Saturn and Pontiac, whose sales plummeted 88 percent in March.

"They haven't increased consideration for the remaining brands," said Jim Hall, principal of consultant 2953 Analytics Inc. in Birmingham, Mich. "Killing brands does not increase the consideration for the brands you're continuing. Obviously, they have to do that."

GM released results for the four remaining lines, which each posted gains of more than 40 percent, almost an hour before the complete tally.

Honda Motor Co., based in Tokyo, posted a 22 percent gain to 108,262. The adjusted increase was 18 percent, compared with a 17 percent estimate from

Hyundai Motor Co., based in Seoul, said it sold 47,002 vehicles, a gain of 15 percent. Yokohama, Japan-based Nissan Motor Co. jumped 43 percent to 95,468.

Toyota sales rose 35 percent on an adjusted basis.

Industry sales matching analysts' projections would still underscore the market's contraction in the recession. Annual U.S. deliveries averaged 16.8 million last decade through 2007. The 2008 total was 13.2 million, and 2009's tally of 10.4 million was the fewest in 27 years, according to industry researcher Autodata Corp. of Woodcliff Lake, New Jersey.