March 3 (Bloomberg) -- General Motors Corp., Ford Motor Co., Chrysler LLC and Toyota Motor Corp. said sales fell in February as rising fuel prices and a slowing economy dragged the industry to its steepest decline in seven months.

GM's light-vehicle sales dropped 12.9 percent, Ford's slipped 6.6 percent and Chrysler was down 14 percent. Toyota, No. 2 in U.S. sales ahead of Ford and Chrysler, posted its second decline of 2008 and its sixth in eight months.

GM and Ford scaled back production plans for next quarter. ``Primarily it's driven by the weak economy,'' said Mirko Mikelic, who helps manage $22 billion at Fifth Third Asset Management in Grand Rapids, Michigan, including GM debt.

``It's been difficult for people to refinance and get credit.'' Last month's 6.3 percent sales decline was the industry's seventh since June, reinforcing projections for sluggish sales in the first half of this year.

Analysts forecast auto sales in the U.S. this year of about 15.5 million, the lowest since 1998. Industrywide sales totaled 1.18 million in February, down from 1.25 million in February 2007.

The industry's annualized sales rate for February fell to 15.4 million cars and light trucks from 16.6 million a year earlier, according to Autodata Corp., of Woodcliff Lake, New Jersey.

Automakers have sold an average of 16.8 million light vehicles in the U.S. each year this decade. Stalled Economy The six-year U.S. economic expansion stalled in December and January, possibly marking the beginning of a recession, said Martin Feldstein, Harvard University economist and president of the National Bureau of Economic Research, in a Bloomberg Television interview last week.

The economy lost jobs in January for the first time in more than four years. A report from the Institute for Supply Management today showed manufacturing in the U.S. contracted in February at the fastest pace in almost five years.

The deteriorating housing market and gasoline selling at a nine-month high helped drive the Reuters/University of Michigan consumer sentiment index to a 16-year low in February. ``The general feeling of wealth in the country is shaken,'' John Mendel, executive vice president of Honda Motor Co.'s U.S. sales unit, said in an interview last week.

The slump may hurt domestic automakers more than foreign rivals. Chrysler President Jim Press said last week that GM, Ford and Chrysler won't be able to block overseas-based carmakers from permanently holding more than half of the U.S. market as the three U.S. companies continue to cede share.

Honda and Nissan Motor Corp., the second- and third-largest Japanese automakers behind Toyota, boosted U.S. sales last month. Pressure Point GM's decline to 268,737 cars and light trucks was led by a 19.2 percent drop in light trucks, including the Chevrolet Silverado pickup. Cars fell 1.2 percent.

The Detroit automaker said it will cut second-quarter North American production 5.4 percent to 1.08 million cars and trucks. Ford's slide to 196,060 sales was spurred by a 9.3 percent decline in cars.

Gains for smaller models such as the Ford Fusion and Focus failed to offset shrinking demand for larger sedans such as the Ford Taurus and Crown Victoria.

Light truck sales were down 5.3 percent, including a 4.9 percent falloff in F- Series pickups and a 27 percent plunge for the Explorer sport- utility vehicle.

Ford reduced plans for North American second-quarter production by 10 percent to 730,000 and also said it will go to one shift from two at assembly plants in Chicago and in Louisville, Kentucky, later this year.

Toyota Toyota sold 182,169 vehicles in February. The Toyota City, Japan-based automaker was dragged down as dealers await full production of the redesigned Corolla small car. The Prius hybrid also fell.

Toyota sold 14,400 Tundra pickups, up from 9,669 a year earlier. Chrysler, No. 4 in U.S. sales, fell 14 percent to 150,093, paced by a 32 percent decline in its Dodge Grand Caravan and a 23 percent drop in the Jeep Wrangler SUV. Chrysler said some of the decline stems from planned reductions in low-profit sales to rental-car companies.

Chrysler said it would boost incentive spending by 5 percent in March over February, including no-interest 72-month loans for 2007 models and no-interest 60-month loans on most 2008s.

The company also will offer Dodge Ram trucks with Hemi engines at no extra cost compared with smaller engine varieties. Fit and Civic Honda sold 115,397 vehicles last month, up 4.9 percent from a year earlier.

Gains for the Tokyo-based automaker were led by the Fit and Civic small cars and CR-V and Pilot SUVs. Nissan, Japan's third-largest automaker, sold 86,219 vehicles last month for a 1.2 percent increase.

Sales of Daimler AG's Mercedes-Benz vehicles rose 7.3 percent, and Volkswagen AG, based in Wolfsburg, Germany, was up 1.2 percent. Bayerische Motoren Werke AG fell 1.8 percent, and Porsche SE sales declined 11 percent.

The average U.S. price of a gallon of gasoline rose 5.9 percent last month to $3.17, the highest since June, according to motorist group AAA. The median sales price of existing homes slid 4.6 percent from a year earlier in January, to $201,100.

Last month had 25 selling days, one more than February 2007. Analysts and some automakers adjust for the difference when reporting percentage changes.

Bloomberg and other automakers use unadjusted comparisons, which are about 4 percentage points higher.

To contact the reporters on this story:

Jeff Green in Southfield, Michigan at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ;

Alan Ohnsman in Los Angeles at This e-mail address is being protected from spambots. You need JavaScript enabled to view it