April 2 (Bloomberg) -- Toyota Motor Corp.’s incentive push after record recalls helped the automaker post a March U.S. sales increase following two months of declines, while Nissan Motor Co. led gains among the largest Asia-based brands.

Sales surged 41 percent from a year earlier for Toyota, which offered no-interest loans and discount leases on most of its namesake brand’s models, and 43 percent for Yokohama, Japan- based Nissan. Honda Motor Co. reported a 22 percent increase and Hyundai Motor Co. said it had a 15 percent gain.

“Toyota’s numbers this month show that consumers do respond to incentives, especially if they perceive them as unusual,” said Jesse Toprak, vice president of industry trends at forecaster TrueCar.com in Santa Monica, California. “The problem for Toyota is, how long can they keep these up, and how will consumers respond in April?”

The effort by the world’s largest automaker spurred an industrywide incentive surge that, along with improving consumer confidence, brought buyers back to showrooms. Toyota added its discounts, valued by Edmunds.com at $2,256 a vehicle in March, to counter global recalls of more than 8 million vehicles.

Japanese and South Korean automakers boosted combined sales 29 percent to 522,775, according to Autodata Corp. Their market share rose to 49 percent from 47.1 percent a year earlier, the Woodcliff Lake, New Jersey-based research firm said.

Record Incentives

March “will be the highest ever for average combined incentive spending for Japanese automakers, including a record- high month for Toyota,” said Jessica Caldwell, director of industry analysis for Edmunds.com.

Spending industrywide rose to an average of $2,742 a vehicle, from $2,642 in February, according to Santa Monica- based Edmunds.com. Japanese automakers averaged $2,058, up $224 from a month earlier.

Toyota rose 1.5 percent to close at 3,775 yen on the Tokyo Stock Exchange. Honda gained 1.4 percent to 3,335 yen, Nissan climbed 1.1 percent to 822 yen, and Hyundai advanced 5.8 percent to 128,000 won in Seoul.

Industrywide March sales rose 24 percent to 1.07 million, Autodata said. Ford Motor Co. led U.S.-based automakers with a 40 percent jump, General Motors Co.’s sales increased 21 percent and Chrysler Group LLC’s fell 8.3 percent.

Toyota’s Recalls

Toyota on March 2 began offering incentives such as subsidized leases after the Toyota City, Japan-based automaker’s recalls to fix defects linked to unintended acceleration and to adjust brakes.

“Our marketing programs clearly had an impact,” Don Esmond, Toyota’s U.S. senior vice president, said in a conference call yesterday. If customers were concerned about the safety of its vehicles, incentives “wouldn’t matter,” he said.

Sales jumped 41 percent for the Toyota brand and 42 percent for the Lexus luxury division. The March gains helped the automaker overcome sales declines the previous two months and post a 7.2 percent increase for the first quarter.

Toyota’s market share for March was 17.5 percent, up 2 percentage points from a year earlier, according to Autodata. The carmaker’s sales also rose 33 percent to 61,200 units last month in China and jumped 51 percent in Japan.

Honda Leases

Honda said it sold 108,262 vehicles in March, rising from 88,379. The Tokyo-based company last month for the first time offered discount leases on all Honda-brand vehicles.

John Mendel, Honda’s U.S. executive vice president, said in an interview yesterday at the New York International Auto Show that the lease offer, with no down payment, deposit or payment due for a month, wasn’t more expensive than a typical promotion.

“It’s just a math problem,” he said. “Instead of charging $199 a month on an Accord, for example, we forgo the down payment and charge $250 a month. It pretty much works out the same.”

Honda’s U.S. market share last month was 10.2 percent, a drop of 0.1 point from a year earlier, according to Autodata.

Nissan outsold Chrysler for the second time this year, with an increase to 95,468 vehicles from 66,634. The gains were led by the Altima sedan, Sentra small car and Rogue crossover.

“We didn’t fundamentally didn’t change our incentives,” Brian Carolin, senior vice president of the company’s U.S. operations, said in an interview in New York. “We didn’t react to the ‘Toyota lift.’”

Hyundai, Kia

Nissan’s March market share climbed to 9 percent, from 7.8 percent, according to Autodata.

Hyundai reported a sales increase to 47,002 vehicles from 40,721 a year earlier. The Seoul-based company yesterday in New York showed off the U.S. version of its Equus luxury sedan that will cost as much as $60,000.

“Hyundai didn’t have as big a percentage increase as some of its competitors as a result of what it did last year,” said Toprak. “It was growing while the market was shrinking.”

The company’s market share fell 0.3 point to 4.9 percent in March as its sales rose slower than the industry’s.

Kia Motors Corp., Hyundai’s affiliate, said sales rose 23 percent. Fuji Heavy Industries Ltd.’s Subaru, a Toyota affiliate, reported a 46 percent increase for the month.

Among other Asia-based brands, Mazda Motor Corp.’s sales grew 5.5 percent and Mitsubishi Motors Corp. reported an 18 percent increase from a year ago. Japan’s Suzuki Motor Corp.’s sales fell 8.3 percent.

Automakers were buoyed in March by rising consumer confidence and spring weather after February blizzards in the U.S. Northeast. The Conference Board’s confidence index rose to 52.5 from 46.4 a month earlier as gloom over job prospects began to lift.

--With assistance from Katie Merx, David Welch and Keith Naughton in Southfield, Michigan; and Makiko Kitamura in Tokyo. Editors: John Lear, Dave McCombs

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net