Chrysler was the weakest of the large automakers. Its sales plunged 30 percent in October, the day before Fiat SpA
Based on initial results from major automakers, U.S. auto sales appear to have bounced to an annualized rate of 10.5 million units in October, a level not seen in a year except for July and August when the U.S. government's cash for clunkers incentives program sparked a surge in auto sales.
The October sales are a key indicator because they are the first month of U.S. sales not affected by the clunkers boom, which provided incentives of up to $4,500, or the backlash that followed in September.
A rate of 10.5 million units would mean a jump from the 9.22 million rate in September after the incentives program had ended and inventories were decimated. It would also be a slight decline from October 2008, the first month after the financial markets collapsed.
Automakers said they were cautiously optimistic. GM said the U.S. economy and auto industry were starting to show signs of recovery and the results suggested the sector may be stabilizing after four years of declines.
GM posted a 4 percent sales gain, Ford Motor Co
Korea's Hyundai Motor Co <005380.KS> posted a 49 percent sales rise that blew past expectations and allowed the automaker to take more market share from rivals.
Nissan Motor Co Ltd <7201.T> reported a gain of nearly 6 percent, while Honda Motor Co Ltd <7267.T> reported a sales decline of less than 1 percent.
We're seeing the industry get some legs under it, GM sales analyst Mike DiGiovanni said on a conference call.
While the sales results were viewed as positive, industry executives continued to question the speed and strength of any recovery given the high U.S. unemployment rate.
We expect consumers to remain cautious as the recovery gains traction, said Ford economist Emily Kolinski Morris.
Toyota U.S. sales chief Bob Carter said the automaker expects a very gradual U.S. economic recovery.
GM GAINS MARKET SHARE
With inventories still below normal levels, automakers were able to pull back on discounts and other sales incentives in October. Ford estimated industrywide incentives were down 10 percent from a year earlier while it cut its own spending on such discounts by 30 percent.
Ford, which surprised analysts by posting a third-quarter profit of nearly $1 billion on Monday, said it gained market share due to strong demand for cars and crossover vehicles.
Strong demand for the Fusion sedan, and versions of the Taurus car and F-150 pickup truck helped Ford raise its share of the U.S. market to more than 15 percent, the company said.
Vehicles from the 2010 model year accounted for 80 percent of Ford's sales. New vehicles tend to require lower levels of incentives to lure buyers, meaning they generate higher profits, analysts said.
GM's sales rose year-over-year for the first time since January 2008 and the automaker said it also gained market share, standing at an estimated 21 percent for the month.
(Reporting by David Bailey and Soyoung Kim, writing by Ben Klayman in Chicago, editing by Matthew Lewis and Patrick Fitzgibbons)