A Jump of 24% in March auto sales, Toyota rebounds

Toyota sales jumped nearly 41 percent in March, snapping two months of sales declines amid massive vehicle
recalls and a rare production and sales halt for the world’s biggest
automaker.

General Motors GM.UL sales rose nearly 21 percent overall from a year earlier and it led the
industry in total vehicle sales. Toyota was second in total sales, while
Ford Motor Co ranked third after a nearly 40 percent sales increase.

U.S. sales topped the 1 million vehicle mark in March, which was the strongest monthly result since September 2008,
excluding August 2009 when “cash for clunkers” incentives drove sales up
sharply.

The strength in the United States was also reflected in sales in Europe and Asia, as
temporary government scrapping schemes boosted demand.

Industry executives attributed the U.S. sales rebound in part to incentives, pent-up demand from February when
snowstorms hit many areas, to a subsiding of headlines on Toyota and
some signs of U.S. economic stability.

The U.S. sales increase contrasts with March 2009 when the industry was
mired in a deep U.S. sales downturn ahead of bankruptcies by GM and
Chrysler.

Only Chrysler among the largest automakers posted a U.S. sales decline in March. Chrysler said
sales fell 8.3 percent in March from a year earlier and it planned
incentives.

“Retail sales were really artificially inflated by huge incentives going on in the
marketplace and did not reflect true demand,” Edmunds.com Director of
Industry Analysis Jessica Caldwell said, adding that April would be a
better indicator.

Toyota traditionally has spurned deep discounts, but launched unprecedented
incentives in March to try to win back customers, including zero-percent
financing for five years on top models such as the Camry sedan.

Don Esmond, Toyota U.S. senior vice president for sales, said on a conference call that incentives would be
extended beyond April 5, but offered no specifics.

“We need a little bit of a kick-start to kind of get the market in our direction and we’ll continue,” Esmond
said. “We’re not going to walk away from our customers.”

GM and Ford had incremental increases in incentives in March from February, according to Edmund’s data. Toyota
incentives jumped $375 from February to a record $2,256 for the
automaker.

GM, TOYOTA SALES NECK-AND-NECK, FORD CLOSE

GM’s U.S. sales rose 20.6 percent overall to 188,546 vehicles in March
including brands that are being discontinued, pushing it slightly ahead
of Toyota’s 186,863 in sales.

Ford, which plans to sell its Swedish brand, Volvo, to China’s Geely, said
March U.S. sales rose 39.8 percent to 183,783 vehicles. Ford expected to
gain U.S. retail market share for the 17th time in the past 18 months.

GM said March U.S. sales jumped across all of its four core brands. Newer GM models like the Chevrolet Equinox, GMC
Terrain and Buick Lacrosse continued to see strong sales, GM said.

GM Vice President of Marketing Susan Docherty said GM incentives for all of its brands averaged $2,800 in
March, falling below the industry average for the first time and the
automaker was not interested in buying market share.

“We have been down that road before and know it’s a dead end,” Docherty said of using high incentives to drive
sales.

GM incentives were down $200 in March from February 2010, and $2,000 from a year earlier in J.D.
Power PIN data.

Nissan Motor Co U.S. sales rose 43.3 percent in March from the prior year, putting it ahead of Chrysler.

Chrysler, now under the management control of Italy’s Fiat SpA,
extended sales incentives for most of its 2010 model vehicles through
May 3 that were set to expire Thursday including zero-percent financing.

Still, Chrysler incentive spending was down sharply from March 2009, when it had heaped sweeteners on its vehicles
to drive sales and stave off bankruptcy.The
Obama administration rejected a Chrysler turnaround plan at the end of
March 2009, setting the stage for a government-supported bankruptcy
plan.

Hyundai Motor Co’s U.S. sales rose 15.4 percent in March from a year earlier, in line with
a forecast that Hyundai USA President John Krafcik gave at the New York
auto show earlier this week.

J.D. POWER RAISES FULL-YEAR SALES FORECAST

The seasonally adjusted annualized rate of auto sales was nearly 11.8
million, according to Autodata. U.S. auto sales ran at a 10.8 million
vehicle rate in January and 10.4 million rate in February.

Influential tracking service J.D. Power and Associates has raised its outlook for full-year U.S. auto industry
sales to 11.7 million vehicles, from 11.5 million vehicles.

Toyota estimates U.S. auto industry light vehicle sales of about 11.5 million for the year, while other automakers
expect sales of 11.5 million to 12.5 million.

French and Japanese car sales rose in March, as government incentives boosted demand, while South Korea’s
Hyundai Motor racked up impressive sales growth despite the end of
subsidies in its home market.

Car makers have benefited from government scrapping incentives in major markets across Europe, but industry experts predict a sales dip as the programs
come to an end in some countries.

French car sales rose 12.8 percent in March, French car makers’ association
CCFA said on Thursday, while Japanese sales jumped by a quarter to cap a
business year that relied heavily on government incentives.

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