Car Sales To Have Huge Surge In March But At Big Cost To Firms

Edmunds reports that incentives have increased the public’s “intent to purchase” Toyota’s by 40% in March. That may help the Japanese car company some, but its competitors have rolled out incentives as well. Car sales should hit 13.2 million this month, up from February’s 10.8 million. That is the highest level in nearly three years.

Toyota will probably be the net winner in March because expectations for its  sales were so low. But, Ford (F) is almost certain to keep up the momentum that it has had for nearly a year. The automaker is “hot” in America because of a new line of fuel-efficient cars and clever marketing. Ford passed GM in domestic sales last month.

The biggest loser in March will almost certainly be Chrysler. Its market share in the US has dropped to 7% and it is likely to fall behind Nissan this year. Most months,  its drop more than 30% most months,  making the automaker’s survival still in doubt

The divisions that GM has not closed are still increasing sales, but the implosion of Toyota is important for GM to maintain the gains against its arch rival. And, the world’s No.1 car company is not as badly wounded as most industry experts thought, at least not if March sales are as good as experts believe they will be.

Douglas A. McIntyre