General Motors Co
While higher gasoline prices drove demand for smaller, more fuel-efficient vehicles such as GM's Chevrolet Cruze, analysts said the rising prices at the pump could threaten any recovery. Ford Motor Co
The recovery is fragile, Edmunds.com analyst Michelle Krebs said, adding that sales in March weakened later in the month as gasoline prices rose.
The consumer does not like uncertainty, and they had a heavy dose of it in March.
Also raising concerns is the expected impact of the Japan crisis on the global auto supply chain.
GM said total U.S. sales in March for its four brands rose 11.4 percent from last year to 206,621 vehicles. Including its four former brands -- Hummer, Pontiac, Saab and Saturn -- GM sales rose 9.6 percent.
Edmunds had expected a gain off 11 percent including the former brands, and TruCar.com and JP Morgan also said the results missed expectations.
Auto sales represent one of the first snapshots every month of U.S. consumer demand, and 34 economists surveyed by Reuters estimated March sales would rise 12 percent on average. Other automakers are scheduled to report March U.S. sales later on Friday.
March is traditionally a stronger sales month than February, but lower incentive spending by GM, Toyota Motor Corp <7203.T>
GM sales chief Don Johnson said incentives per vehicle on average were $600 to $800 lower last month and the automaker would be prudent and disciplined with its deals going forward.
The expected slower industry growth has raised concerns about the recovery in the U.S. auto market, although U.S. employment on Friday recorded a second straight month of solid gains in March and the jobless rate fell to a two-year low of 8.8 percent, marking a decisive shift in the labor market that should help underpin the economic recovery.
Despite the sales increase, rising oil prices and the resulting pain at the pump could push consumers away from more lucrative light trucks.
Light truck sales, which include pickup trucks and sport utility vehicles, make up a little more than half of U.S. auto sales and account for a disproportionate share of profits at the U.S. automakers because of their higher prices.
Clearly, with gasoline prices rising, we have seen a shift to the compact segment, Johnson said. Whether that continues or not I think depends on what the trend of gasoline prices is going to be in the future.
Gasoline prices rose more than 3 cents to $3.60 a gallon over the last week, the Energy Department said. The average price of regular gas is 80 cents higher than a year ago as conflict in Libya and rising tensions in the Middle East have sent the cost of crude oil to above $100 a barrel.
Another focus is the aftermath of the Japanese earthquake and subsequent tsunami last month which caused many supplier plants there to close or cope with power outages.
Johnson said GM is monitoring the situation closely, but declined to speculate on its impact. He said the U.S. automaker has a very good level of vehicle inventory going into April.
GM said total U.S. sales for passenger cars rose 15 percent in March, while crossover and pickup truck sales rose 20 percent and 11 percent, respectively.
GM shares were up 2.5 percent at $31.80 on the New York Stock Exchange at midday, below their $33 price when they reappeared on the NYSE last November.
Ford shares were up 2.7 percent at $15.31.
(Additional reporting by Bernie Woodall in Detroit, editing by Matthew Lewis)