Detroit: Toyota Motor Corp on Thursday said its US sales jumped nearly 41% in March as the automaker rebounded from consecutive monthly declines amid record company incentives aimed at getting beyond the worst recall crisis in its history.
The results vaulted Toyota back to No. 2 in the US market behind General Motors, which saw its sales rise nearly 21% overall from a year earlier. Ford Motor Co came in third, with sales up nearly 40%.
US auto sales overall were expected to be up as much as 27% in March from a year earlier, according to Ford.
Only Chrysler among the largest automakers posted a US sales decline in March. Chrysler said sales fell 8.3% in March from a year earlier and it planned incentives.
“Retail sales were really artificially inflated by huge incentives going on in the marketplace and did not reflect true demand,” Edmunds.com director of industry analysis Jessica Caldwell said, adding that April would be a better indicator.
Toyota launched unprecedented discounts in March to try to win back customers including zero-percent financing for five years on top models such as the Camry sedan after monthly US sales declines in January and February.
The world’s top automaker, Toyota faced multiple recalls, congressional hearings and an extraordinary sales halt because of potentially defective accelerator pedals.
Toyota traditionally has spurned steep discounts to protect resale values and has said that it would announce its plans for incentives in April next week while executives hinted that they were likely to continue.
GM and Ford had incremental increases in incentives in March from February, according to Edmunds data, while Toyota incentives jumped $375 from the prior month to $2,256, a record for the Japan-based automaker.
GM, Toyota sales neck-and-neck, Ford close
GM’s US sales rose 20.6% overall to 188,546 vehicles in March including brands that are being discontinued, pushing it slightly ahead of Toyota’s 186,863 in sales.
Ford, which plans to sell its Swedish brand Volvo to China’s Geely, said March US sales rose 39.8% to 183,783 vehicles. Ford expected to gain US retail market share for the 17th time in the past 18 months.
GM and Ford US sales were up 43.3% and 42.7% respectively in their continuing brands.
GM said March US sales jumped across all of its core four brands. Newer GM models like the Chevrolet Equinox, GMC Terrain and Buick Lacrosse continued to see strong sales, GM said.
GM vice president of marketing Susan Docherty said GM incentives for all of its brands averaged $2,800 in March, falling below the industry average for the first time and the automaker was not interested in buying market share.
“We have been down that road before and know it’s a dead end,” Docherty said of using high incentives to drive sales.
GM incentives were down $200 in March from February 2010, and $2,000 from a year earlier in JD Power PIN data.
Nissan Motor Co US sales rose 43.3% in March from the prior year, putting it ahead of Chrysler.
Chrysler, now under the management control of Italy’s Fiat SpA, extended sales incentives for most of its 2010 model vehicles through May 3 that were set to expire Thursday including zero-percent financing.
Still, Chrysler incentive spending was down sharply from March 2009, when it had heaped sweeteners on its vehicles to drive sales as it sought to stave off bankruptcy.
The Obama administration rejected a Chrysler turnaround plan at the end of March 2009, setting the stage for a government-supported bankruptcy plan.
Hyundai Motor Co’s US sales rose 15.4% in March from a year earlier, in line with a forecast that Hyundai USA President John Krafcik gave at the New York auto show earlier this week.
JD power raises full year sales forecast
AutoNation Inc Chief Executive Mike Jackson, head of the largest US dealership network, said in an interview with CNBC on Thursday that he expected the industry to break the 12 million vehicle mark for an annualized rate in March.
US auto sales ran at a 10.8 million vehicle annualized rate in January and at about 10.4 million in February.
Influential tracking service JD Power and Associates has raised its outlook for full year US auto industry sales to 11.7 million vehicles, from 11.5 million vehicles.
French and Japanese car sales rose in March, as government incentives boosted demand, while South Korea’s Hyundai Motor racked up impressive sales growth despite the end of subsidies in its home market.
Carmakers have benefited from government scrapping incentives in major markets across Europe, but industry experts predict a dip in sales as the programs come to an end in some countries.
French car sales rose 12.8% in March, French carmakers’ association CCFA said on Thursday, while Japanese sales jumped by a quarter to cap a business year that relied heavily on government incentives.