In this Feb. 7, 2010 photo, a 2010 GMC Acadia sits under the sign at a General Motors dealership in Silverthorne, Colo. General Motors Co. said Thursday, April 1, 2010, its March sales rose 21 percent over the same month last year, a sign that an incentive war will boost overall U.S. auto sales. (AP Photo/David Zalubowski)

GM sales up as incentives draw buyers

By TOM KRISHER
AP Auto Writer

Sales of General Motors Co. cars and trucks rose 21 percent last month compared with a dismal March last year, a sign that U.S. auto sales are benefiting from an incentive war touched off by Toyota.

Sales at Hyundai and Subaru also increased.

While revamped models helped the three companies, it's also likely that incentives brought out more buyers for all automakers. Toyota raised its rebates and low-interest financing deals in early March to counter publicity about safety-related recalls, and other automakers were forced to respond. Toyota will report sales later Thursday, but a top company executive predicted that sales would rise 40 percent.

For years automakers have pledged to reduce incentives and sell on the strength of their products, but most haven't been able to stick to the plan because of competition.

GM said Thursday sales of new vehicles from its four core brands — Buick, GMC, Chevrolet and Cadillac — rose 43 percent to 188,546. Redesigned vehicles like the Chevrolet Equinox midsize crossover and Buick LaCrosse luxury sedan saw strong sales.

GM, which is shedding Pontiac, Saturn, Saab and Hummer, sold 3,100 car and trucks from those brands last month compared with over 27,000 a year earlier, when there were more of those vehicles on dealer lots.

There were conflicting reports on just how much GM spent on incentives.

Susan Docherty, GM's marketing chief, said the automaker's incentive spending actually dropped in March, and for the first time on record is below the industry average.

Citing data from the research firm J.D. Power and Associates, she said GM's March incentive spending was $2,800, down $200 from February and $2,000 less than March of last year.

"We want to earn our market share. We're not interested in buying it," she said.

But the industry analysis firms TrueCar and Edmunds.com predicted that GM's March incentive spending would lead major automakers at more than $3,500 per vehicle, well above the industry average of roughly $2,800.

Toyota has been forced to recall more than 8 million cars and trucks around the world mainly due to reports of unintended acceleration. The company is fixing gas pedals and floor mats in many of its top sellers including the Camry midsize sedan.

Company sales fell 9 percent in February, before it launched its aggressive incentives. The broader industry's sales climbed 13 percent that month.

The automaker is to update its incentives on Monday but has said some of its generous incentives would continue.

Hyundai's sales rose 15 percent, propelled by sharply higher demand for its newly released Sonata sedan and its Tucson small SUV.

Industry sales tanked in March of last year as the economy slowed, layoffs rose and GM and Chrysler headed into bankruptcy protection. Last March was among the worst auto sales months in decades.