Vehicle sales to surge in March, analysts predict

Automakers will see steep increases in March sales as steep discounts and incentives are luring recession-weary shoppers back into showrooms, two market research firms said Friday in separate reports.

Automotive research Web site Edmunds.com forecast a 34 percent jump in sales in March, with annualized auto sales rate hitting 13.2 million vehicles. That's up from 9.86 million last year. The figure, called SAAR, reflects how many cars would be sold if the current sales pace persisted the entire year, adjusted for seasonality.

"The industry has been recharged by incentives from Toyota and other automakers," Edmunds analyst Jessica Caldwell said. "There is a lot of money in the marketplace right now and people are responding."

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Toyota, which has been reeling from the recall of more than 8 million vehicles worldwide due to faulty accelerator pedals, earlier this month launched zero-percent financing deals and other incentives to lure customers back into showrooms.

J.D. Power and Associates said in a separate report that sales will rise by 23 percent and that annualized auto sales would reach 1.1 million vehicles in March, up from 856,137 in March last year.

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However, J.D. Power cautioned that the lift is coming largely from sales incentives, not necessarily higher demand from consumers.

"There is some risk that the incentives offered by Toyota could spark an incentive war among several automakers," said Jeff Schuster, executive director of global forecasting for J.D. Power. "While this may lead to a temporary increase in sales momentum, it could also potentially slow the pace of long-term recovery."

Automakers are scheduled to report March U.S. sales on April 1.