U.S. auto sales in March will increase almost 1.9 % from a year earlier, even as consumer discounts continue to remain at record levels, industry consultants J.D. Power and LMC Automotive said on Friday.  

March U.S. new vehicle sales will be about 1.62 million units, up about 1.9 % from 1.59 million units a year earlier, the consultancies said.

The forecast was based on the first 16 selling days of the month.

The seasonally adjusted annualized rate for the month will be 17.3 million vehicles, up from 16.8 million a year earlier.

Retail sales to consumers, which do not include multiple fleet sales to rental agencies, businesses and government, were set to increase 1 % in March.

Highlighting "policy uncertainty" over whether Republican U.S. President Donald Trump will press ahead with plans for a "border tax" on imported vehicles, LMC and J.D. Power said they were maintaining their 2017 sales forecast of 17.6 million vehicles, an increase of 0.2 % from 2016.

U.S. sales of new cars and trucks hit a record high of 17.55 million units in 2016.

But as the market has begun to saturate, automakers have been hiking incentives to entice consumers to buy.

The consultancies said industry incentive spending was $3,768 per new vehicle sold, the highest ever for the month of March. The previous record for the month was set in 2009, during the height of the Great Recession.

In a statement, Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power, said the "competitiveness of the industry continues to be evident in ever-rising incentive levels."

Incentives as a percentage of a manufacturer's suggested retail price were at 10.4 % in March, exceeding 10 % for the first time in the month since 2009, J.D. Power and LMC Automotive said.