Mazda Motor Corp said it expects a single digit increase in March U.S. sales, lagging the projected growth in industry sales, after cutting back on sales to rental companies and incentives to consumers.

The Japanese automaker's North American CEO said on Wednesday when lower fleet sales are stripped out, the company's retail sales will likely jump by double-digits in March from a year earlier.

When you look at the history of Madza over the last several years, we really have been contracting our fleet sales, James O'Sullivan told Reuters on the sidelines of the New York International Auto Show.

He added that in March, our retail sales will be up and as robust as some of those other numbers you're hearing right now.

Bigger rivals Toyota Motor Corp and Nissan Motor Co have projected around a 35 percent jump in March auto sales compared to the previous year.

Hefty incentives have been one factor driving sales for Toyota after widespread safety concerns hit the automaker's sales in the first two months of this year.

O'Sullivan said Toyota's move could boost sales for the overall industry by getting more consumers into dealerships.

They're (consumers) going to start considering 'Hey maybe it's a good time to buy a car, he said. They're going to cross shop a lot of various brands.

But Mazda's incentive spending has been down year over year, O'Sullivan said. He added the company now spends less on incentives than Honda Motor Co, Toyota or Nissan.

We're okay with the programs we have out there, he said. We're not losing business because other people are spending differently than we are.

(Reporting by Deepa Seetharaman; Editing by Bernard Orr)