Toyota incentives spur 23% increase in U.S. auto sales

Toyota Motor Corp.'s incentives will help boost U.S. industrywide auto sales by 23 percent this month, researcher J.D. Power & Associates projected.

Deliveries in March probably will run at an annualized rate of 12.1 million vehicles, compared with a pace of 10.4 million in February and 9.9 million a year earlier, J.D. Power said today in a statement. The annual rate is an industry gauge that corrects for seasonal buying patterns.

"Sales increased robustly during the first half of March and are expected to remain strong throughout the remainder of the month," Jeff Schuster, J.D. Power's executive director of forecasting, said in the statement. The gains are "setting the industry recovery back on track."

Toyota, staggered by recalls of more than 8 million cars, is offering deals such as no-interest financing that were matched by some competitors. Schuster said there is "some risk" that the offerings from the world's largest automaker might spark "an incentive war" in the industry.

U.S. sales of cars and light trucks will reach 1.09 million in March, according to Westlake, California-based J.D. Power, which gathers transaction data from more than 8,000 dealers.

J.D. Power is the second forecaster in as many days to call for a recovery in March sales driven by the incentives from Toyota City, Japan-based Toyota. The annual sales rate may reach 13.2 million vehicles, researcher Edmunds.com said yesterday.

"The industry has been recharged by incentives offers from Toyota and other automakers who responded in kind," Jessica Caldwell, senior analyst for the Santa Monica, California-based company, said in a statement.

Toyota's incentives are having such a strong effect on overall auto sales that it's clear whether a recovery is under way, said Edmunds.com Chief Executive Officer Jeremy Anwyl.

"We shouldn't view this as a sign that the economy is recovering; this sales bounce is driven by incentives," Anwyl said in a statement. "Take away the incentives and the sales will slow dramatically."