Economy

Auto industry eyes strong early March sales with optimism

Most of the attention paid to the auto industry recently has revolved around Toyota's problems with its vehicles.

But get this: Excluding last August's frantic run on vehicles fueled by the Cash for Clunkers subsidy, sales at dealers nationwide have taken off at a pace not seen in a long time.

Even stranger, Toyota is a big reason for the boost, responding to its recall problems and the public's focus on safety issues by kicking in a discount program that competitors have matched.

Edmunds.com, a popular car-buying Web site, found that in the first eight days of March, U.S. vehicle sales rose to a seasonally adjusted, annual rate of 12.5 million.

Analysts don't think sales will continue at quite that sizzling a pace. If they did, consumers would buy about 2 million more vehicles than they did last year, the industry's worst sales year since the early 1980s.

Other factors besides the Toyota incentives are at work. The economy slowly continues to improve, and March is traditionally a big auto sales month.

Toyota began generating the excitement March 1, discounting most of its vehicles, and offering zero-percent financing and subsidized leases.

The move was a big change for the Japanese automaker. Because of its reputation for quality and reliability, it has historically maintained pricing discipline.

Competitors, including General Motors Corp. and Ford Motor Co., followed suit with zero-percent financing offers, as well as big cash rebates.

The March surge has followed a good February, and area dealers said a momentum seemed to be developing that they had not seen in a long time. Since the beginning of the year, Dick Smith Ford's monthly sales have increased 30 to 45 percent compared with the same months in 2009.

To read the complete article, visit www.kansascity.com.

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