U.S. Auto Sales Increase 2.3%, Edging Japanese

U.S. vehicle sales rose 2.3% in March--a month during which domestic auto makers did better than Japanese manufacturers for the first time in nearly two years, the auto industry reported Friday.

The latest report indicated that recent price increases by the Japanese auto makers may be hurting their sales. The Japanese manufacturers, who have fared better than their U.S. rivals throughout the recession, posted a 6% decline in sales for the month, while the Big Three U.S. auto makers said sales climbed 5.6%.

“This is the first time I’ve seen in the last couple of years where there’s been this change of fortunes,” said David Garrity, an analyst at McDonald & Co., a Cleveland-based investment research firm. “The Japanese have been climbing higher and higher and higher, so this does mark some sort of a reversal.”

Sales of domestically built cars slipped 1.2% during the last 10 days of March, but robust truck sales drove total vehicle sales up for the month compared to the same period last year. On an annual rate basis, the pace of sales during the last 10 days of the month edged up slightly to 6.2 million cars from 5.8 million during mid-March. For the whole month, sales of imported and domestic cars and trucks crept from 12.4 million vehicles in February to 12.5 million.

Nearly imperceptible though it is, analysts and auto executives point to the slight quickening in the sales pace as evidence of a slow but sure recovery.

“We’re not out of the hole yet and the recovery will definitely be slow,” said Robert McCurry, head of Toyota’s U.S. sales arm. “But we’re finally seeing a true willingness to commit on the part of the consumer.”

Dealers, who cautiously avoided overstocking their lots during the months when customers were scarce, have responded to the hint of a sales uptick by ordering more vehicles. As a result, U.S. auto makers have beefed up their production schedules for the second quarter to nearly 11% above last year’s second-quarter output.

At the Cerritos Auto Square, where the 21 franchises pool sales numbers each week, business was up about 10% over the last two weeks, said Allen Leader, vice president of the Browning Automotive Group.

While growing consumer confidence and the budding housing recovery have both helped to fuel sales, dealers say many of their recent customers just can’t afford to put off buying a car much longer.

“I think there’s pent-up demand,” says Bill Quirk, general manager of North End Auto Sales Inc.’s Subaru and Mazda dealerships in Lunenburg, Mass.

Truck sales jumped 10.7% during March, offsetting a 2.1% drop in car sales for the month. General Motors Corp. said sales of its cars and trucks combined increased 0.9%, while Ford Motor Co. posted a sales hike of 8.2%. Chrysler’s minivans boosted the No. 3 auto maker’s March sales up 14.3% over the same period last year.

Among the Japanese selling cars in the United States, Toyota posted a 9.5% rise in sales, while Honda and Nissan said sales plummeted 20.7% and 13.5% respectively.