March Car Sales: In Like a Lion, Out Like a Lamb

March Car Sales: In Like a Lion, Out Like a Lamb

As automakers put the finishing touches on their March car sales numbers that will be announced on Thursday, it appears that the month came in like a lion but went out like a lamb, according to Edmunds.com's ongoing tracking of actual sales transaction data.

The month started off strong as Toyota launched aggressive incentives, which included zero-percent financing and attractively discounted lease prices, and other automakers followed suit. But the great deals look as if they fizzled by month's end. That raises the question -- even if automakers continue heavy incentives through April, will they be effective?

March Sales Pace

At the mid-month mark, Edmunds.com took a look at sales transaction data that it gathers and saw strong sales -- relatively speaking compared with 2009's recession levels. Sales, at that point, were flirting with a 13.2-million Seasonally Adjusted Annual Rate (SAAR). At that time, Toyota's severely slumping sales of January and February were seeing an 80-percent bounce.

Later in the month, the pace slowed some, prompting Edmunds.com to forecast a 12.4-million SAAR for the month when automakers posted sales. That represented a significant improvement over the year earlier; March sales would come in about 30 percent higher than March 2009 sales and about 45 percent ahead of February sales.

Of that forecast, Edmunds.com CEO Jeremy Anwyl warned it was too early to declare victory.

"Although this SAAR sounds promising, it's too early to wave the flag and say that the economy has turned the corner," he said. "Incentives drove sales this month, but those incentives were defensive moves by Toyota and its competitors, and are unlikely to last because inventories are simply not high enough to justify them."

Consumer confidence may not have been high enough to support that level of sales either. 

Sure enough, the March sales pace weakened even further in the closing days of the month, Edmunds.com analysts noted late Wednesday night on the eve of March sales reporting, though they are sticking with the 12.4-million SAAR forecast based on known strong performances by a number of automakers.

Toyota executives signaled Wednesday at the New York auto show that the automaker's sales would see a 40-percent boost and incentives would likely be extended beyond the April 5 expiration date. Nissan execs also said their sales would be up 35 percent, mirroring Toyota's. Hyundai is having a good month, most likely its highest sales month ever aside from August 2009's Cash for Clunkers month. Ford is likely to outsell General Motors again in March. Of the Big 7, only Chrysler is expected to see lower sales.

The other wild card in March sales is how many fleet sales automakers -- mostly the Detroit three -- will log. The last few months have seen a heavier than normal amount of fleet sales added into the totals, disguising what could be weakness of retail demand. -- Michelle Krebs, Senior Analyst and Editor at Large

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.