U.S. auto sales slipped just 3.5 percent in February from strong levels a year earlier, as heavily promoted industry discounts continued to be a big draw for American consumers, according to a story by Sholnn Freeman in the Wall Street Journal.

Sales ran at a seasonally adjusted pace of 16.7 million vehicles last month, down from 17.3 million vehicles a year earlier, according to Woodcliff Lake, N.J., research firm AutoData Corp. February sales totaled 1,310,768 cars and trucks, according to the company.

The results had auto-industry officials sounding more optimistic that demand for new vehicles this year will maintain a relatively healthy pace that is just slightly lower than last year's record rate, according to the Wall Street Journal. Much of the sales

resilience came at the expense of U.S. automakers, with Asian and European brands continuing to take market share from many Big Three brands despite Detroit's heavily promoted deals.

Japan's Toyota Motor Corp.'s sales, including Lexus, grew 1.7 percent from a year earlier to 126,092 vehicles. Germany's BMW AG reported a 15 percent increase in U.S. sales. Korean automakers Hyundai Motor Co. and Kia Motors Corp. also picked up market share due to robust sales gains; Hyundai's sales rose 14 percent,

while Kia's surged 38 percent.

Honda Motor Co.'s sales dropped 4.6 percent, however, primarily because of a big decline in sales of its long-in-the-tooth Accord midsize car. And German automaker Volkswagen AG's sales fell 6.3 percent, as sales of its once-hot Beetle and Jetta slowed.

Among Detroit's Big Three, General Motors Corp. led the way in February, with sales inching 0.5 percent higher to 408,804 cars and light trucks. Sales dropped 12 percent at Ford Motor

Co.; DaimlerChrysler AG's Chrysler Group saw sales fall 11 percent. The three top U.S. automakers blamed sharp declines in rental-company orders for helping to sink sales.

The industry and analysts were expecting sales to fall 8 percent to 10 percent compared to 2001. In a sign of its new resurgence, GM said its Chevrolet brand toppled the Ford line from the No. 1 spot among vehicle brands for

the first time in 11 years. Overall, GM's February market share grew to 31.2 percent from 29.9 percent a year earlier.

The New York Times reported that George Pipas, Ford's manager of industry sales analysis, said of GM that "I would say congratulations if they've managed to pull that off."

"As a dealer, you never want to hear news like that," said Jerry Reynolds of Dallas, the No. 2 Ford dealer in the U.S. and the automaker's top truck seller. "GM, particularly Chevrolet, is coming out of a product cycle that's changing a lot of vehicles, while we've been dormant. We need some product, we need it quick, and it's coming. We just got to hold on until it gets here."

Ford dealers said the automaker offered an extra $200 to $400 in incentive money to sales managers at dealerships in an effort to hold on

to the No. 1 crown. Ford has been especially hurt due to sinking sales of its large Expedition sport-utility vehicles, according to dealers.

Ford said sales at its Ford, Mercury and Lincoln brands all fell last month, in part because of a 29 percent decline in fleet sales. Ford has relied heavily on such sales in the past.

In reporting its sales performance - off 11 percent compared to 2001 - Chrysler blamed lower fleet sales and concentrated on the upbeat performance of its trucks. Dodge Ram sales were up 19 percent compared to last year and Jeep Liberty was up 10 percent compared to January 2002.

According to National Automobile Dealers Association (NADA)Chief Economist Dr. Paul Taylor, the relatively healthy industry performance in February suggests that NADA's estimate of 15.9 million units of sales for the year are potentially too modest an expectation. However, many expect that the strong incentives that are currently bolstering sales will be subdued by automakers looking to restore stronger profitability.

Sales this February are 50,000 units behind February sales last year, and significantly behind those of February 2000. Thus, if improvement in the economy does not provide some solid back-loaded sales gains, it may be difficult to greatly exceed 15.9 million units, according to analysts.