DETROIT -- Toyota Motor Corp. and Ford Motor Co. posted big U.S. sales gains in March as industrywide incentives and improving consumer confidence brought buyers back to showrooms.
General Motors Co. deliveries rose 21 percent, enough to overtake Ford, which grabbed the top U.S. spot in February for the first time since 1998. Ford sales jumped 40 percent, while Toyota posted a 41 percent increase.
Total U.S. sales advanced 24 percent from the depressed levels of March 2009, when automakers were battling the weakest demand in almost three decades. The seasonally adjusted annual sales rate of 11.7 million was lower than analysts' forecasts but still marked the year's strongest and the second healthiest since August, when the U.S. cash-for-clunkers campaign boosted sales.
“There's still a question of how strong is the underlying retail demand,” said Michelle Krebs, an analyst at Edmunds.com. “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.”
Chrysler Group fell 8 percent after posting its first monthly gain in more than two years in February. Chrysler, No. 5 in U.S. sales through February, last month was outsold for the second time this year by Nissan North America, which soared 43 percent.
The Hyundai brand's 15 percent increase was about half of what analysts had forecast.
American Honda was up 22 percent, in line with predictions. Subaru, the only automaker to post U.S. sales increases in each of the past two years, rose 46 percent.
While last month's SAAR was below the 12 million average forecast of eight analysts compiled by Bloomberg, it was still the fifth straight gain from a year earlier. The March 2009 pace was 9.3 million, according to Automotive News data.
Through March, U.S. sales are up 15 percent from a year earlier.
For the first time on record, GM's per-unit incentives were below the industry average, said Susan Docherty, vice president of U.S. marketing. GM spiffs totaled $2,800 per vehicle, down nearly $2,000 from March 2009, she said. The industry averaged $2,910.
GM incentives ranked fourth highest, behind Ford Motor, Chrysler and “an import competitor,” she said.
GM, Ford and other automakers use J.D. Power and Associates data to measure incentives, Docherty said.
But Edmunds.com's incentive measure puts GM first among all automakers with $3,519 spent per vehicle last month. That compares with an industry average of $2,742, the consumer auto site says.
Both Edmunds.com and J.D. Power measure customer cash, interest and lease incentives, along with cash to dealers for specific vehicles. But J.D. Power also includes cash that automakers give dealers for meeting sales volume objectives.
Still, that shouldn't make J.D. Power's per-vehicle numbers lower for GM, said Edmunds.com analyst Jessica Caldwell.
“We've been doing the same thing for years, and it's weird that we're coming to a point where all of the sudden we're showing a huge discrepancy,” she said.
GM retained Chevrolet, Cadillac, Buick and GMC brands as part of its government-backed restructuring, and has shed or is shedding Saab, Hummer, Saturn and Pontiac, whose combined sales plummeted 88 percent in March.
GM released results for the four remaining lines, which each posted gains of more than 40 percent, almost an hour before issuing its complete tally.
“They haven't increased consideration for the remaining brands,” said Jim Hall, principal of the consulting firm 2953 Analytics Inc. in suburban Detroit. “Killing brands does not increase the consideration for the brands you're continuing. Obviously, they have to do that.”
Industry sales that failed to match analysts' estimates underscored 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 lowest in 27 years.
Automakers were buoyed in March by rising consumer confidence and spring weather after February blizzards in the Northeast. The Conference Board's confidence index rose to 52.5 from 46.4 a month earlier as gloom over job prospects began to lift.
On March 2, Toyota began offering incentives such as subsidized leases after the automaker recalled more than 8 million vehicles globally to fix defects linked to unintended acceleration and to adjust brakes.
Competitors responded with their own discounts while avoiding the spending levels the industry rang up in March 2009 as GM and Chrysler added incentives ahead of their bankruptcy filings. Incentives are down 14 percent from a year earlier, according to Edmunds.com.
Bloomberg News, Reuters, Chrissie Thompson and Jesse Snyder contributed to this report.