March auto sales drop, GM off 13 percent

By David Bailey

DETROIT (Reuters) - Auto sales dropped 12 percent in March in a decline blamed on shaky consumer confidence, high fuel prices and concern that a housing market downturn could spread into a full recession.

All three Detroit-based automakers posted declines on Tuesday. Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz), No. 2 in U.S. sales behind General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), posted its fourth consecutive U.S. sales drop that marked the most extended downturn since 1995 for the No. 1 Japanese automaker.

GM and Toyota held out the prospect the U.S. market could stabilize in the current quarter and start to climb back as consumer confidence recovers from the battery of concerns that hit in March. Others challenged that view.

"I think the main weakness is consumer confidence," said GM sales chief Mark LaNeve. "It's (mortgages) resetting. It's worry about the news. It's presidential candidates telling you how bad it is. It's Bear Stearns."

Overall U.S. March auto sales fell 12 percent before adjusting for the number of sales days in the month, driving the full-quarter down by 8 percent from a year earlier.

Toyota, notable for its fast growth and conservative forecasting, said it would be forced to lower its forecast for U.S. industry sales of 16 million vehicles in 2008.

"We're not immune to economic cycles," said Toyota division sales chief Bob Carter.

GM reported a 13 percent sales decline for the month, Chrysler LLC a drop of 13.2 percent, and Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) a 7.6 percent decline. Toyota, which cut U.S. truck production in March, said sales fell 3.4 percent.