Car sales soar on strong incentives

LOS ANGELES — March is turning out to be a torrid month for auto sales.

Several projections place the annual sales rate at 12 million to 13 million, which would be 20 percent to 30 percent above the pace of the first two months of the year.

Retail sales have taken off, in part because of the steep sales incentives Toyota Motor Corp. is using to regain market share lost to its recent large recalls and subsequent dip in quality and reliability perceptions.

Better credit availability and improved weather this month also is helping sales, analysts said. Automakers are also starting to log big gains in fleet sales as corporations look for more fuel efficient vehicles for their sales staff and the rental car market starts to rebound.

This isn't all good news.

"There is some risk that the incentives offered by Toyota could spark an incentive war among several automakers," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, the auto market research company. "While this may lead to a temporary increase in sales momentum, it could also potentially slow the pace of long-term recovery."

— McClatchy News Service

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