U.S. auto sales are expected to show a gain of about 20 percent from the still-depressed levels of a year earlier in February, but the recent rise in oil prices could slow or even derail the industry's recovery, analysts and industry executives say.

Major automakers are set to report auto sales data for February on Tuesday.

The sales results represent one of the first snapshots of U.S. consumer demand, and the February data are expected to show steady demand without evidence of the kind of accelerating turnaround that some analysts had forecast.

For the fifth consecutive month, the annualized sales rate is expected to hold above 12 million vehicles in February.

The average forecast of 41 economists surveyed by Reuters was 12.6 million vehicles on that basis for February, about flat from the sales rate in December and January.

Ford Motor Co's sales analyst George Pipas said the consistent pace of sales was encouraging even though there was a risk that the recovery might not find a higher gear as quickly as expected.

I think this could be seen as the base for an increase in sales in spring and summer, potentially, Ford Motor Co's sales analyst George Pipas told reporters in a briefing Monday. Maybe there are things like oil that could jeopardize that.

U.S. crude futures have pulled back from highs above $100 per barrel but investors remain concerned about the security of oil supplies from the Middle East.

Fuel prices at the pump increased to $3.38 a gallon in the past week, the biggest jump since 2005, when Hurricane Katrina disrupted petroleum supplies, the Energy Department said.

Prices at the pump averaged $2.79 for all of 2010 when U.S. vehicle sales began to recover, according to industry data.

Customers in the U.S. are the most sensitive to oil prices. When they go up, hybrids fly out of showrooms and SUVs and pickup truck sales fall, said Toyota Executive Vice President Takeshi Uchiyamada.

If you take a long-term view, the supply-demand gap for oil will mean prices will gradually rise, so I expect consumers will become more sensitive to the price of fuel, Uchiyamada said on Monday in Geneva.


Rising oil prices could slow sales of light trucks, at least in the short term, analysts said.

Light sales, which include SUVs and pickup trucks, make up about half of U.S. auto sales and they account for a disproportionate share of profit at the Detroit automakers because of their higher prices.

Profits would inevitably weaken given the still-wide contribution margin between large SUVs/trucks and compact cars, J.P. Morgan analyst Himanshu Patel said in a note.

Another focus in the February sales reporting will be whether GM backs off the richer spending on incentives that boosted its sales in both January and February.

General Motors Co, the largest U.S. automaker, could see its sales jump as much as 37 percent spurred by industry-leading incentives, according to Edmunds.com.

But Edmunds also estimated that GM spent an industry-leading $3,857 on the average vehicle incentive in February, up from both February and year-earlier levels.

GM has defended its more aggressive discounting, while some of its rivals have complained that the action has touched off a price war in which other automakers are more willing to accept lower profits for higher market share.

We tried to make the company a little more agile, a little quicker in the marketplace and, frankly, a little less predictable, GM Chief Executive Dan Akerson said last week of the incentive programs, which include loyalty bonuses for returning GM car buyers.

Toyota Motor Corp is expected to report a 29 percent increase in sales for February, according to Edmunds.

A year earlier, the Japanese automaker had been embroiled in a series of recalls that tarnished its reputation.

In the past month, a U.S. government probe concluded the automaker's electronics were not to blame for reported episodes of unintended acceleration.

U.S. regulators wrapped up their investigation of Toyota after the automaker agreed to recall another 2.2 million vehicles for the risk that loose carpeting or floormats could cause the accelerator to stick.

(Reporting by Deepa Seetharaman; Editing by Gary Hill)