Friday, April 2, 2010

Sweet incentives lift auto sales in March

DETROIT — It's a buyer's market for car shoppers, with good deals expected to last at least another month as automakers continue to match Toyota discounts that lured thousands of buyers in March.
Seeking to repair the damage from a series of safety recalls, Toyota Motor Corp. offered unprecedented incentives last month, including low-interest financing and free maintenance for returning customers.

The strategy worked so well that Toyota's U.S. sales jumped 41 percent and the automaker sold just 1,683 fewer cars than General Motors — the closest it has ever come to overtaking GM in monthly sales, according to the auto research Web site

GM and other automakers matched the deals, boosting the auto industry's overall sales by 24 percent for the month compared with March 2009.

Sales at Franklin-based Nissan rose 43 percent, while Subaru's shot up 46 percent. Hyundai Motor Co.'s sales rose 15 percent. Chrysler Group LLC, which has few new products, continued to struggle, with sales down 8 percent.

GM reported a 21 percent jump in new vehicle sales for the month. Ford's sales climbed nearly 40 percent with strong demand for its Fusion and Taurus sedans. Honda's sales rose 23 percent.

How long the solid sales gains will last once incentives shrink or disappear remains to be seen.

"There's still a question of how strong is the true, underlying retail demand," said Michelle Krebs, an analyst for

"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," Krebs said.

Toyota began offering incentives on March 2 — such as subsidized leases — after the Japan-based automaker began worldwide recalls of more than 8 million vehicles to fix defects linked to unintended acceleration and to adjust brakes.

Other carmakers responded with discounts of their own to boost sales.

Industry incentives averaged $2,742 per vehicle last month, according to

Toyota's incentives alone hit $2,256 per vehicle, their highest level ever, up nearly $700 from 2009.

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