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Associated Press
A salesmen digs out cars covered in snow Jan. 7 at a dealership in Indianapolis. The U.S. auto industry itself was attempting to dig itself out in February after bitter cold and heavy snow took a heavy toll on buyer traffic and auto sales.

Automakers slide on ice in February

– March will be one of the most crucial months for the U.S. auto industry in years.

Sales were slower than expected in January and February, and the number of unsold cars on dealer lots grew. Some automakers had to resort to juicy discounts to lure reluctant buyers.

Most industry executives, dealers and analysts blame the historic cold temperatures and snowfall, and expect warmer weather to restore consumers’ enthusiasm for car buying. Most still expect annual sales to exceed 16.1 million, which would be the highest level since 2006.

But a continuation of the trends could signal more fundamental reasons for sagging demand. For instance, consumer confidence fell slightly last month, according to the Conference Board. That hurts car sales, because buyers need to be confident before they invest in a car.

“March will give us a sense of how real the recovery is going to be this year,” said Alec Gutierrez for Kelley Blue Book.

U.S. consumers bought 1.2 million new cars and trucks in February, unchanged from a year ago. That follows a 3 percent drop in January – the first year-over-year decline since August 2010.

New vehicle sales this year are on pace to hit a little more than 15 million. Last year, the industry sold 15.6 million cars and trucks.

General Motors, Ford, Toyota, Honda, Hyundai and Volkswagen all reported sales declines in February. GM and Ford said the month started slowly but sales began to recover in the second half. If that momentum continues into March, fears of a broader sales slowdown may prove to be unfounded.

“We expect, heading into the month of March, a very solid spring market,” said John Felice, Ford’s U.S. sales chief.

Slow sales caused dealer inventories to rise in January and February, putting pressure on companies to clear their lots. Larry Dominique, of TrueCar.com, says there is an 85-day supply of vehicles in the U.S. A 60-day supply is more typical.

As for individual automakers’ sales in February

•GM sales fell 1 percent. Buick sales jumped 19 percent but GM’s other brands were down.

•Ford’s sales fell 6 percent. F-Series pickup truck sales were up 3 percent, but Ford’s car sales dropped by 14 percent.

•Toyota sales fell 4 percent. The luxury Lexus brand gained 9 percent, thanks to new vehicles, but the Toyota brand struggled. Sales of the Toyota Prius hybrid plunged 28 percent.

Nissan’s sales rose almost 16 percent, led by the new Rogue crossover. But Nissan’s average sales price fell almost 4 percent – more than $1,000 – compared with a year ago, according to TrueCar.

•Chrysler sales rose 11 percent. It boosted discounts on the Ram pickup to an average $5,000 a truck, or $1,000 more than competitors from Ford and GM.

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