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Toyota spurs jump in sales of autos

Most of the attention paid to the auto industry recently has revolved around Toyota's problems with its vehicles.

But get this: Excluding last August's frantic run on vehicles fueled by the "Cash for Clunkers" subsidy, sales at auto dealers nationwide have taken off at a pace not seen in a long time.

Even stranger, Toyota is a big reason for the boost, responding to its recall problems and the public's focus on safety issues by kicking in a discount program that competitors have matched.

Edmunds.com, a popular car-buying Web site, found that in the first eight days of this month, U.S. vehicle sales rose to a seasonally adjusted, annual rate of 12.5 million vehicles.

Analysts don't think sales will continue at quite that sizzling a pace. If they did, consumers would buy about 2 million more vehicles than they did last year, the industry's worst sales year since the early 1980s.

Other factors besides the Toyota incentives are at work. The economy slowly continues to improve, and this is traditionally a big auto sales month.

Toyota began generating the excitement March 1, aggressively discounting most of its vehicles and offering zero-percent financing and subsidized leases.

The move was a big change for the Japanese automaker. Because of its reputation for quality and reliability, it historically has maintained pricing discipline.

Competitors, including General Motors Corp. and Ford Motor Co., followed suit with zero-percent financing offers, as well as big cash rebates.

The March surge followed a good February, and some dealers said a momentum seemed to be developing that they had not seen in a long time.

Still, dealers have tended to remain cautious.

That 12.5 million annualized figure provided by Edmunds would pale in comparison with 2007, when the industry sold more than 16 million vehicles.

"We don't think it'll stay at quite that level," said Jessica Caldwell, a senior analyst with the Web site. "The rush of the early shoppers getting the incentives tends to die down as the month goes on. We think March will end up at an11.3 million" annualized sales rate.

That figure, she added, still would surpass any month since September 2008, excluding last August's government-subsidized car sale. The auto industry's tailspin began in October 2008, when the financial markets collapsed and consumer financing dried up.

That led to the auto industry's sales nadir last year, which included the government having to save GM and Chrysler from liquidation.

Given how much sales plummeted, last month's double-digit jumps for most automakers, compared with the same month a year ago, shouldn't be surprising.

Exceptions were Toyota, whose sales fell about 9 percent because of the recalls and temporary halt in new-car sales, and Chrysler, whose sales were flat and have continued to struggle since it emerged from bankruptcy.

Overall, industry sales rose 13 percent last month.

So despite weather conditions, Toyota's problems, and an economy that still carries a nearly double-digit unemployment rate, auto sales appear to be getting back on track.

"I wouldn't call it a rebound yet, but we're beginning to see a slow, steady recovery," said Caldwell of Edmunds.

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