Dow Jones Industrial Average (^DJI 0.67%) is trading 66 points higher, or 0.40%, at 3 p.m. EDT after some positive manufacturing and vehicle sales data hit the news feeds. The Institute for Supply Management's manufacturing PMI moved higher from 53.2 in February to 53.7 in March. That indicates the U.S. economy is strengthening a bit after a weather-related slowdown early in 2014 -- and any reading above 50 indicates expansion. With that in mind, here's a closer look at how some vehicle sales checked in for the last month of the first quarter.

Some industry analysts and journalists had questioned if new-vehicle demand was beginning to weaken after a slower than expected start this year. The auto industry looks to have shaken off its doldrums as the weather began to clear up and foot traffic increased at dealerships. The industry's seasonally adjusted annual rate of sales is projected to near 16 million units in March -- final figures weren't calculated at the time of this writing -- which is an improvement over last year's 15.3 million-unit level for the same month.

Fiat Chrysler Automobiles (NASDAQOTH: FIATY) led all major automakers with a 13% rise in March sales. Its charge was led by the Jeep and Ram pickup brands, which posted staggering sales gains of 47% and 26%, respectively.


Sales of Ford's Fusion soared in March. Source: Ford.

Ford (F 6.10%) recorded its first year-over-year sales increase for 2014 with sales increasing 3% to 244,167 wholesale vehicles.

"March sales turned noticeably higher mid-month and finished strong," said John Felice, Ford vice president, U.S. marketing, sales, and service, in a press release. "Fusion set an all-time record in March, as overall retail sales in the West continued to expand at the fastest rate in the nation -- including California being up 32 percent. F-Series also had a very strong month, as did Lincoln MKZ." 

Sales of Ford's Lincoln luxury lineup were up 31.4% in March compared to last year and remain nearly 36% higher for the first quarter. That's great news for investors hoping to see the Blue Oval perform another turnaround with its struggling luxury brand. Look for the upcoming Lincoln MKC to drive sales to a level not seen in recent years.

Toyota (TM 0.69%) also posted its firstly monthly sales increase in March with a 5% gain over last year. One of the company's biggest stories was the Camry's 11.4% sales jump. Competition has been heating up in the midsize sedan market, America's largest automotive segment. Toyota's Camry has been the top-selling car in the U.S. for the last 12 years, but it has seen a significant increase in competition from Ford's Fusion, Honda's (HMC 1.20%) Accord and Nissan's Altima.

Foolish takeaway
The automotive industry's increased sales in March is a good sign for investors, although there is more to consider. Incentives, which have the potential to make each vehicle sold less profitable for automakers, increased significantly last month.

According to estimates by TrueCar, the average incentive per light vehicle was roughly $2,773 in March. That's a 7.9% increase over the same time last year and a 2.6% increase from February. Larry Dominique, executive vice president of TrueCar, believes trouble is brewing, "An incentive-fueled battle is on the horizon," he said, according to Automotive News. 

While Dominique could indeed be correct about a coming incentive war, I hope he isn't. We have to consider that March marks the end of Japanese automakers' fiscal year. That means Japanese brands typically push incentives to make one last sales surge in the month.

We also have to consider that General Motors had been reluctant to use incentives to sell its newly redesigned Silverado and Sierra trucks, until last month. Full-size trucks have higher incentive spending, average transaction prices, and at a higher sales volume to boot.

Are those two factors the only reason incentive spending increased last month? Probably not, but it's something to consider until we see whether Japanese brands pull back incentive spending in April -- that will definitely be one key data point for investors to watch.