For the first time since last October, U.S. monthly auto sales dipped below 15 million vehicles on a seasonally adjusted annualized rate. Research firm Autodata Corp reported industrywide U.S. sales came in at a rate of 14.92 million vehicles in April.

"Sales are coming in a little bit below expectations, but still quite strong," said Alec Gutierrez, analyst with Kelley Blue Book. "As we've seen all year and the last couple of years, it looks as though the auto industry remains one of the few bright spots in the broader economy ... in addition to housing."

Fewer sales to commercial customers is not necessarily a bad thing for the U.S. auto industry because there has been an increase in sales to consumers, a segment that is more profitable, several analysts said.

However, General Motors Co (>> General Motors Company), tops in the U.S. market, expressed concern that Japanese and South Korean automakers may raise incentives spending in coming months, which could force other manufacturers to do the same to compete.

"We have seen more aggressiveness certainly in the incentive space, both from the Japanese as well as the Koreans," said Kurt McNeil, GM's chief of U.S. sales. "In our case, we're trying to just continue obviously to remain competitive and disciplined."

Since the downturn of the auto industry in 2008 and 2009 which included bankruptcies for GM and Chrysler, the three major U.S. automakers have increased per-vehicle profit partly by curbing spending on incentives. Incentives are given by the automakers to dealers or directly to consumers in the form of lower financing rates or cash rebates that cut the cost of buying a new vehicle.

Japan's weaker yen provides flexibility to offer incentives without hurting profit as much for Japanese automakers, but not as much as a few years ago. Now, the majority of vehicles sold in the United States by Toyota Motor Corp (>> TOYOTA MOTOR CORPORATION), Honda Motor Co Ltd (>> Honda Motor Co Ltd) and Nissan Motor Co Ltd (>> Nissan Motor Co., Ltd.) are made in North America.

Still, some auto executives and industry analysts said they feared that the weaker-than-expected performance of major foreign-based automakers will cause a price war in the coming months that could cut in to company profit.

Nissan announced late on Tuesday that it is cutting prices on seven models that represent 65 percent of its U.S. offerings. But Nissan also said it would lower its incentives on these models to maintain the amount of money the company makes on them.

APRIL SALES RISE 8.5 PCT VS YEAR AGO

For April, U.S. auto sales rose 8.5 percent from a year earlier, according to Autodata. Analysts polled by Thomson Reuters had expected a rise of 11 percent.

"I don't think we need to ring any alarm bells," said TrueCar.com analyst Jesse Toprak. "It's still a very healthy marketplace that is recovering on merit, meaning that consumer demand is propelling the market."

U.S. automakers gained share in a slowing U.S. auto market in April as improvements in the housing sector played to Detroit's traditional strengths: pickup trucks and sport-utility vehicles.

Ford Motor Co's (>> Ford Motor Company) April sales rose 18 percent, while GM and Chrysler Group LLC posted gains of 11 percent. Chrysler is majority-owned by Italy's Fiat (>> Fiat SpA).

Toyota, the third-largest automaker in the U.S. market, showed a drop of 1.1 percent in April sales, missing analysts' expectations. Honda, the No. 5 automaker by sales in the U.S. market, showed a gain of 7 percent, in line with estimates.

Monthly auto sales are an early sign of consumer spending. For all of 2012, U.S. auto sales rose 13 percent to 14.5 million light vehicles. That was still below the 16.7 million vehicles the U.S. auto industry sold on average in the 10 years ending in 2007.

GM shares ended 2.1 percent lower at $30.18 on Wednesday and Ford shares slipped 1.7 percent to $13.38 on the New York Stock Exchange.

TRUCKS, CROSSOVERS SHINE

"It's all about pickup trucks," said Citi Research analyst Itay Michaeli. "This is going to be the big story of 2013. Every pent-up demand metric out there is more robust for pickup trucks than it is for the overall sales."

Pickup trucks and SUVs are traditionally the strongest aspects of the domestic automakers' lineups, even as all three major U.S. automakers have diversified to include more small cars since record-high gasoline prices in 2008 and the industry downturn in 2009.

GM, Ford and Chrysler posted better-than-expected sales for the month. Executives said the boom in pickup trucks is under way as housing construction and home prices march higher. Sales of pickup trucks, which are much favored by contractors and tradesmen, have historically been tied to the housing construction market.

"The full-size pickup truck segment continues to show signs of strength, supported by replacement demand and the recovery in housing," said Erich Merkle, Ford U.S. sales analyst.

Truck sales have grown at three times the rate of the U.S. auto industry this year, Merkle said. Ford said the small utility segment, which includes the Ford Escape crossover, accounted for 15 percent of the industry last month, 1 percentage point higher than a year ago.

First-quarter U.S. housing starts rose 36 percent, while home prices rose 9.3 percent in February, said Jenny Lin, Ford economist.

GM's primary pickup truck, the Silverado, had an April sales rise of 28 percent. Chrysler's Ram pickups rose 49 percent. Ford's F-Series pickup trucks, the best-selling models in the U.S. market for 36 years, showed a 24 percent increase.

Automakers that are more reliant on passenger cars saw a less robust performance during the month. Volkswagen AG (>> Volkswagen AG) reported a sales decline of 10 percent.

Nissan's April sales rose 23 percent but slightly missed analysts' expectations.

Jonathan Browning, president and chief executive of Volkswagen Group of America, said industrywide sales of midsize sedans rose only 2.7 percent in the first quarter. Ford said industry sales of full-size pickup trucks were up 20 percent.

(editing by John Wallace and Matthew Lewis)

By Bernie Woodall and Deepa Seetharaman