(Corrects sales rise of Chrysler Ram 1500 pickup to 26 percent instead of 24 percent, paragraph 17)
* Analysts worry over high incentive levels
* GM sales down 1 pct, beating expectations of drop of 6 pct
* Toyota sales down 4 percent, missing expectations
* Chrysler, Nissan beat sales expectations
DETROIT, March 3 (Reuters) - U.S. auto sales in February were slightly brisker than expected as hefty incentives lured customers into dealerships late in the month despite cold and snowy weather, raising concerns about industry profitability.
The chilly temperatures were enough to pressure last month's sales, which are expected to be up only slightly from the year-ago month, automakers said.
General Motors Co said it expected industrywide U.S. auto sales of 15.4 million vehicles in February on an annualized basis, matching a forecast of analysts polled by Reuters.
The frost on sales for January and February will thaw in March as temperatures rise and customers return to showrooms in greater numbers, some industry analysts said.
However, late February's high customer incentives, the discounts to lure buyers into showrooms, will carry over into March, cutting in to companies' profit, several analysts said.
Larry Dominique, executive vice president of industry research firm TrueCar, said there are about 80 days of supply on dealer lots, compared with a more desirable level of 60 to 65 days.
"We have on average two-and-a-half months of supply on dealer lots," said Dominique, adding that most automakers have not cut production, which will lead to even more oversupply, which will increase pressure to raise incentive levels further.
Dominique pointed out that companies book the sales for their balance sheets on the wholesale level, so "every field agent for every manufacturer" is going to press dealers to take more vehicles when they are already oversupplied.
Monthly auto sales are typically an early indicator of consumer demand. But January and February are usually two of the slowest sales months every year.
OLD HABITS DIE HARD?
"The fear is going back to the old ways of having to sell the deal and not the car after years of staying clean," said Jesse Toprak, chief analyst for research firm Cars.com. "(Dealers) don't want the companies to fall off the wagon when it comes to incentives."
For now, the incentives are not out of control, but Toprak warned, "it might get a bit out of control this summer and beyond if the pace of inventory accumulation does not slow down."
Industrywide, the average incentive in February was about $2,633 per vehicle, up 5 percent from a year earlier and up 3.3 percent from January, according to TrueCar.
Partly offsetting the higher incentives was a 3.6 percent rise in average transaction prices, or the figures at which autos are sold.
Unlike January and February, March is often one of the best months for U.S. auto sales. The fact that March has five weekends also bodes well for the U.S. auto industry, said John Felice, Ford's U.S. sales chief.
"Despite all the challenges, it was a robust market," Felice said of February, "and we feel that as we head into March we'll be in very good shape."
GM's U.S. sales in February dipped 1 percent but easily beat analysts' expectations of a 6 percent slide, with sales of 222,104 vehicles.
While GM's Malibu, Cruze and Sonic passenger cars each posted double-digit gains, sales of the company's top-selling Chevy Silverado pickup truck fell 12 percent. The Silverado's slide compares with a rise of 2.6 percent for Ford's F-Series pickups and a gain of 26 percent for Chrysler's Ram 1500 pickup.
GM officials said they trimmed incentives on their trucks from January even as their rivals boosted them. However, Kelley Blue Book analyst Alec Gutierrez said the problem was that GM's new trucks were not enough of a departure from their rivals' current models to make a huge difference.
"They are only marginally better than Ford's previous generation truck and the new Ram," he said, referring to the Silverado. He added that there was nothing to suggest a consumer should pay a premium for the Silverado.
In a research note last week, Barclays analyst Brian Johnson said intense competition in the segment has left GM with the "least successful large pickup truck launch over the last 15 years in terms of share and pricing." While the Detroit company has been able to raise prices, it has cut incentives more slowly than with full-size truck launches in the past.
FORD SLIGHTLY BEATS, TOYOTA MISSES
Ford Motor Co slightly beat expectations last month by posting U.S. sales of 183,947 vehicles, down 6 percent from a year earlier. Ford is the second-largest in the U.S. market by sales.
GM and Ford, which ranks second in the U.S. market, are offering some of the heftiest incentives.
Toyota Motor Corp, the No. 3 seller in the U.S. auto market, saw February sales fall 4 percent at 154,866 vehicles, widely missing expectations of no change from a year ago. Honda Motor Co reported a 7 percent sales decline that also missed analysts' estimates.
Topping analysts' expectations were Chrysler Group and Nissan Motor Co.
Chrysler, a unit of Fiat Chrysler Automobiles, said demand for its two top-selling Jeep models, the Grand Cherokee and the Cherokee SUVs, had helped push its total monthly sales up 11 percent to 154,866 vehicles. Analysts had expected a rise of 8 percent.
Nissan showed a gain of 16 percent, led by a 73 percent jump in sales of its Rogue crossover vehicle. Analysts had expected an increase of 12 percent.
Volkswagen AG reported U.S. sales of 27,112, down 14 percent. Its best-selling vehicle, the Jetta, had sales of 11,908, down 0.5 percent.
GM shares were up 0.2 percent at $36.27 and Ford shares were down 1.3 percent at $15.19 on Monday afternoon on the New York Stock Exchange. (Editing by Lisa Von Ahn and Matthew Lewis)