GM Sales Higher for First Time in 2 Years

GM reported its first monthly gain in U.S. sales in almost two years while Toyota and Ford also improved, a sign the auto industry it starting to crawl back from a yearlong slump.

Demand for new cars and crossovers in October fueled better results for General Motors Co. and Detroit rival Ford Motor Co. GM's sales rose 4 percent from October 2008, while Ford notched a 3-percent gain. Japanese rival Toyota Motor Corp said its sales edged up less than a percent. Less rosy news came from Chrysler Group LLC, whose sales fell 30 percent, though they improved from September.

At GM, the nearly 5 percent jump over last October was led by demand for its four core brands: Chevrolet, Cadillac, Buick and GMC, reports CBS News correspondent Dean Reynolds. GM plans to drop Hummer, Saturn, Pontiac and Saab. Indeed, If they were already gone, company sales would have gone up 11.6 percent.

GM's 60-day money back guarantee and "May the Best Car Win" ad campaign won some positive buzz. So confident was GM's vice chairman Bob Lutz of his cars that he challenged - and beat - a group of journalists driving rival brands in a race. Lutz is 77.

"We've got to do things with shock value," Lutz said. "That kind of open people's minds."

Automakers had said October would be a test of how strong the market was without any effect of the government's Cash for Clunkers program. The industry staggered through a tough September, hurt by the collapse of demand following the clunker rebates that fueled a sales surge over the summer.

The mood was in contrast to a year ago, when consumers were frightened away from showrooms by the early effects of the financial meltdown and credit freeze.

This October, Ford got a boost from new products launches and gained U.S. market share for 12th time in 13 months as it critically acclaimed vehicles continue to grab buyers from rivals. Ford has also benefited from consumer goodwill because it didn't take government bailout money or go into bankruptcy, as General Motors Chrysler did.

Today's report was more good news for Ford, which said Monday it made nearly $1 billion in the third quarter. Ford's North American division also reported its first profitable quarter four years.

More than 80 percent of Ford's sales last month came from 2010 models, which also helped the company lower its incentives.

That was in line with the industry, which spent less to give car buyers big rebates. Automakers focused on clearing out old inventory and focused on selling 2010 models, which are not discounted as heavily.

Fuel-efficient models like the Ford Fusion sedan and Escape small sport utility vehicle sold well, with both notching sales jumps of around 25 percent. Ford's overall car sales rose 11 percent over last October, while crossovers climbed 23 percent.

New 2010 models like the Taurus and Lincoln MKT crossover also flew off dealer lots.

Ford's truck sales, by contrast, fell 10 percent.

Auto industry analysts were impressed by Ford and GM.

"There's a long way to go, but you have to have a few first steps," auto industry writer Paul Ingrassia told Reynolds.

Chrysler, the maker of the Chrysler, Dodge, Jeep and Ram truck brands sold 65,803 vehicles last month, up 6 percent from September. That was when its sales slumped because dealerships could offer few popular models. The automaker, which is announcing a new product strategy on Wednesday, is aiming to show steady improvement from month to month.

What may not happen is Chrysler or GM paying back the taxpayers for the $67 billion they received to stay afloat. A new government report says despite their best intentions it's unlikely either of them will ever be prosperous enough to do that, Reynolds reports.

Looking to boost November sales, Chrysler will offer a slew of new incentive programs this week. The carmaker will offer 0 percent financing for up to 48 months on all its vehicles, and a no-cost maintenance and service program its Jeep and Chrysler brands. Buyers also can opt for $2,500 off their purchase if they don't take the no-interest financing. The deals begin Wednesday and run until Nov. 30.

Ford, meanwhile spent the least on incentives among the Detroit Three automakers, according to Edmunds.com. Ford spent $2,909 per vehicle. That's down one-fourth from October last year and 6 percent from September.

Still, it spent more on incentives than the industry average, with Japanese automakers like Honda and Toyota spending significantly less.

Japanese automaker Subaru said its October auto sales surged 41 percent, helped by strong sales in its Outback and Forester models.