Nissan Motor Co. and Toyota Motor Corp. are launching new incentives to spur U.S. sales of cars and trucks, even though dealers have been concerned recently about supplies of vehicles from Japanese auto makers.

Nissan on Thursday told its dealers in a memo that its supply of vehicles at U.S. dealerships had grown in May from April, and as a result the auto maker is offering subsidized leases and lower pricing on its Altima and Maxima sedans and many of its trucks, reported The Wall Street Journal.

Nissan had geared up production heading into 2011, in expectation of rapid growth this year. As a result, it is still delivering healthy supplies of vehicles to dealerships, while Toyota and Honda Motor Co. are struggling to maintain inventories. All three companies have had to slow production in the last two months following the March 11 earthquake that shook Japan and forced factories across that country to close.

At the beginning of May, Nissan dealers had 175,913 cars and trucks in stock, up about 3,000 from the month before, according to market researcher Autodata Corp. Toyota’s inventory was 277,658 vehicles at the start of May, down from 352,153 the previous month. Honda’s was 172,487, down from 236,034.

Nissan’s sales grew rapidly in the first three months of the year, thanks to a program that paid dealers bonuses for hitting aggressive sales targets. But in April, after the campaign ended, its sales slowed. Nissan’s new incentives are designed to return the company to faster growth.

“Despite this successful sales increase, the Nissan division lost market share [in April] as the total industry was up 17.9 percent. This result does not match our ambition as we have consistently achieved market share gains over the last few years and this is a trend we intend to maintain,” Al Castignetti, vice president of the Nissan division said in the memo. “The main message I want to deliver to you is that here in the U.S. Nissan is in a much healthier position than either of our two main Japanese competitors.”

Nissan also reported higher fiscal fourth-quarter earnings Thursday in spite of the earthquake. In the three months ended March 31, Nissan posted a profit of ¥30.8 billion ($380.6 million), up from a loss of ¥11.6 billion in the same period a year earlier. Nissan’s sales grew 10 percent in the quarter to ¥2.351 trillion from ¥2.138 trillion. Operating profit rose 7.2 percent to ¥88.6 billion from ¥82.7 billion.

Toyota is launching its own raft of new sales incentives. In the past several weeks, it had offered virtually no discounts on any of its models as it tries to conserve inventories.

But with the announcement yesterday that it would ramp up production in North America next month to 70 percent of its normal volumes, the company is trying to avoid deeper market share losses. Toyota’s sales were flat in April and without incentives, May results could have been worse.

Throughout the crisis in Japan, caused by the March 11 earthquake, Nissan has been in a stronger position. Its dealerships in the U.S. had more existing inventory on lots than its two Japanese rivals and it makes more of its top-selling models in North America.

Unlike Toyota and Honda, which are still running at 50 percent or less capacity at plants in North America, Nissan has had only a few down days as its supply of parts has been less affected by Japanese suppliers.

Toyota and Nissan indicated this week that their supply situation appears to be improving. Honda has not yet updated its situation. Its plants in the U.S. have been operating at 50 percent volume and as of yesterday, there were no plans to raise production, said spokeswoman Christina Ra. Honda has very limited incentives on its models in May.

Bayerische Motoren Werke AG won’t increase customer discounts as the race to be 2010’s top-selling U.S. luxury automobile brand goes into the final weeks of the year, reported Bloomberg.

“We’re chasing profit more than we’re chasing volume,” said Peter Miles, executive vice president of operations for BMW’s North American unit. He spoke in an interview today in advance of the Los Angeles Auto Show, which opens to the press tomorrow.

Toyota Motor Corp.’s Lexus, helped by customer discounts, earned the top-selling luxury spot in October, the first time since May, to help widen its lead for the year. The Toyota City, Japan-based company’s luxury brand is under pressure to keep the lead after Toyota’s record recalls this year and new products from competitors BMW and Daimler AG’s Mercedes-Benz division.

The average cost of incentives on Lexus cars rose to $3,746 in October from $1,121 a year earlier, while incentive spending on Lexus trucks rose to $2,810 from $696, according to Autodata Corp., a Woodcliff Lake, New Jersey-based researcher.

BMW lowered its incentive spending by 39 percent last month to an average of $2,926, while Mercedes was relatively flat with a decline of 3 percent to $3,879, Autodata said. BMW’s incentive spending declined 27 percent for the year through October and Mercedes dropped 30 percent.

Subsidizing Leases

BMW traditionally spends most of its incentive money on subsidizing leases, said Jesse Toprak, vice president of industry trends at TrueCar.com, a researcher that follows automobile sales and marketing.

“This year, because of the recovery in the leasing markets, BMW actually was able to control their incentives while still being able to offer attractive lease programs,” he said.

While the same improved leasing conditions apply to Lexus and Mercedes, those automakers are spending on incentives as they go for the No. 1 selling spot, he said.

U.S. sales for this year through October totaled 183,529 for Lexus, 178,080 for Mercedes and 176,736 for BMW, the global leader in luxury-vehicle deliveries.

The totals don’t include non-luxury models such as BMW’s Mini cars or Stuttgart, Germany-based Daimler’s Smart cars and Sprinter vans.

BMW’s November and December incentive spending should be in line with October, Miles said, without providing details.

The company’s U.S. sales will increase 16 percent next year on growth from new products such as the redesigned X3 sport- utility vehicle, the 5-Series and the new 6-Series, Miles said.

“We’re fueling our growth now with new products,” he said.

The race for the No. 1 spot should continue to be close next year, analysts said.

“I think we will see a photo finish” of the 2011 selling year, Toprak said.

DETROIT – Ford Motor Co., moving to wind down its Mercury brand, extended the dealer cash program offered on all Mercury products through September, Automotive News reported.

The program, which allocates $1,500 per vehicle, was set to end Aug. 31.

“We are continuing to provide strong sales tools to our dealers so they are able to remain competitive in the marketplace,” Ford spokesman Steve Kinkade said. Some dealers feared Ford would reduce the per vehicle dealer cash amount to $1,000, but Kinkade says that amount has not been reduced.

Ford announced on June 2 it would shutter the Mercury brand by Dec. 31. It plans to sell all remaining Mercury inventory before the year ends.

Many dealers welcomed the extended dealer cash program as they try to sell their last remaining Mercury products.

“It’s good news. It’s helped us,” said Ed Witt, owner of Witt Lincoln Mercury in San Diego. He has a 30-day supply of Mercury vehicles.

“Business in general is still difficult,” Witt said. “But we have a big luxury market here and we feel confident with a lot of hard work and support from Ford we’ll do fine.”

At the end of July, Ford had about 8,200 Mercury vehicles in U.S. dealer stock, said Ken Czubay, Ford’s vice president of U.S. marketing, sales and service. That’s less than a 40-day supply.

At the end of June, Ford had 10,000 Mercury products in U.S. stock.

Ford plans to end production of Mercury vehicles in early October.

“The sell down is proceeding smoothly,” Czubay said during a July sales call. “By the end of the year there will be very few Mercurys in stock.”

Toyota and Nissan surpassed the industry’s 6.8 percent increase in month-over-month sales in July, which CNW Research attributed to heavy promotions of lease deals and used-car trade-in programs by both automakers.

Toyota’s month-over-month sales increased by 20.4 percent, while Nissan’s jumped by 27.5 percent. Both manufacturers’ car and truck segments outpaced last month’s industry marks by significant amounts. The total industry car sales increased 5.5 percent in July, while total industry truck sales jumped by 8.2 percent.

CNW’s Art Spinella wrote that only the Kia car segment, which achieved a 20 percent sales increase, performed well based on “solid marketing and clever advertising.”

Among the Detroit Three, the Buick car and Cadillac truck segments reported sales increases of 32 percent and 42.5 percent, respectively.

The only Ford nameplate to report a month-to-month sales increase was the Lincoln truck segment.

The European brands had mixed sales results with increases from BMW car, BMW MINI, Saab car, Porsche car and truck, and Volkswagen car and truck. The increases were more of a result of lower June sales numbers than an actual jump in demand, wrote CNW’s Spinella.

The overall sales results illustrate that the market is responsive to manufacturer incentives. “While a majority of automakers have pulled back in general, consumers are focused on those who remain in the incentive game,” Spinella added.

He added that Toyota’s sales figures indicate a strong response to its incentives, but said it won’t help the company’s bottom line in the future.

“After months of dark clouds because of recalls and government accusations, the upturn for the top Asian brand is the first step in ‘clearing its name,’” Spinella continued. “We expect the incentive levels for Toyota to return to earth as soon as memories fade.”

Ford Motor Co., Honda Motor Co. and Nissan Motor Co. added rebates and discounts to attract buyers over the Memorial Day holiday weekend, driving what may be the longest streak of sales increases in almost 10 years, reported Bloomberg News.

Industrywide deliveries probably reached a seasonally adjusted annual rate of 11.2 million light vehicles in May, according to the average of eight analysts’ estimates compiled by Bloomberg. If sales did exceed the 9.9 million rate from a year earlier, it would mean eight straight months of increases for the first time since a stretch that ended in June 2000, according to Bloomberg Data.

Sales during the Memorial Day weekend in the past three years ran about 40 percent higher than the typical May weekend, and sales on the last day of the month were more than double the average day, according to researcher Edmunds.com.

“This weekend’s activity aligns with the start of the big summer selling season,” said Jim Sanfilippo, chief operating officer of Innocean Worldwide Americas LLC, Hyundai Motor Co.’s in-house advertising agency.

Higher discounts may have been needed to help offset the weak retail environment, said Jeff Schuster, executive director of J.D. Power & Associates in Troy, Michigan. Sales to rental- car companies and discounted fleet purchasers may have also boosted results, scheduled to be announced tomorrow, he said.

Ford added $500 rebates May 27 on the namesake brand’s Focus car, Edge sport-utility vehicle and F-150 pickup, said Robert Parker, a spokesman. The discounts also applied to the automaker’s Lincoln MKS and MKZ sedans and MKT and MKX sport- utilities.

Nissan added a $500 discount for most of its namesake brand vehicles from May 28 through yesterday. Honda’s luxury Acura brand is offering lease deals on all models with no down payment and no security deposit, said Chris Martin, a spokesman. The offer started May 28 and runs through July 6.

The annualized rate of sales in the month may match the 11.2 million pace in April, according to Autodata Corp. in Woodcliff Lake, New Jersey.

Ford’s sales in the month may have gained 10 percent or more, and the industry rate could be in the low 11 million vehicle range, Mark Fields, the company’s president of the Americas, said May 24. The Memorial Day weekend would have an “outsized impact” on May’s total, Fields said.

Ford’s May sales probably rose 16 percent from a year earlier, according to analysts surveyed by Bloomberg. The company’s market share should continue to grow if it performs as expected, Fields said.

Honda’s U.S. sales may have increased 22 percent from last May, according to Edmunds.com, which predicted an 11 percent gain by Nissan and 28 percent growth for Hyundai.

Toyota Motor Corp. extended discounts that brought back-to-back U.S. sales increases, and Nissan Motor Co. led the largest Asia-based carmakers’ gains for the second month in a row as auto demand continued recovering in April, Bloomberg reported.

Deliveries for Nissan rose 35 percent from a year earlier, while Toyota yesterday reported a 24 percent advance after continuing no-interest loans and discount leases on most of its namesake brand’s models in April. Honda Motor Co. posted a 13 percent increase and Hyundai Motor Co. sales were up 30 percent.

“Toyota’s incentives pretty much set the pace,” said James Bell, executive market analyst for Kelley Blue Book in Irvine, Calif. “Everybody being up a little bit is tied to the Toyota program — it’s raising the tide for the industry.”

Toyota recalls of more than 8 million autos globally for flaws linked to unintended acceleration and congressional hearings that tainted its image led the world’s largest automaker in March to introduce discounts across its lineup. For now, that strategy will remain in place.

The Tokyo Stock Exchange is closed for a holiday. Hyundai rose 3,500 won, or 2.6 percent, to 138,000 won in Korea Stock Exchange trading. Affiliate Kia Motors Corp., which boosted sales 17 percent, gained 1,150 won, or 4.1 percent, to 28,950 won in Seoul.

U.S. industrywide auto sales rose 20 percent in April to 982,131 cars and light trucks, according to Autodata Corp., a research firm based in Woodcliff Lake, New Jersey. U.S. sales have risen for six consecutive months.

The Asia-based brands boosted their combined U.S. market share to 46.5 percent, a 1 percentage point gain from a year earlier, Autodata said.

General Motors Co., Ford Motor Co. and Chrysler Group LLC, the U.S.-based automakers, held 45 percent, a one-point drop. Sales rose 6.4 percent for GM and 25 percent each for Ford and Chrysler.

Toyota sold 157,439 Toyota, Lexus and Scion vehicles last month, rising from 126,540 a year earlier. The Toyota City, Japan-based company said the increases were led by Corolla small cars, Prius hybrids, Avalon sedans, Highlander and RAV4 sport- utility vehicles, and Sienna minivans.

The automaker, which last month recalled Lexus GX 460 SUVs to adjust stability controls, is expanding production of most models in North America because of rising demand, Carter said.

Nissan reported sales of 63,769 Nissan and Infiniti vehicles, an increase from 47,190. The Yokohama, Japan-based company had the biggest volume increase among Japanese and South Korean automakers in the U.S. this year through April.

Small cars such as the Versa and Sentra posted percentage gains of more than 38 percent, while sales of light trucks including Frontier and Titan pickups and Murano, Rogue, Pathfinder and Armada SUVs were “surprisingly strong,” said Al Castignetti, Nissan’s vice president of U.S. sales.