GM says on track for U.S. sales gain in October

DETROIT (Reuters) - General Motors Co GM.UL said on Wednesday it was on track to post its first monthly year-over-year U.S. sales increase for the first time in 21 months, amid signs of a gradual recovery for the industry and the economy.

"I would say that clearly there are signs that the economy is emerging from the worst recession in 70 years," GM sales analyst Mike DiGiovanni said in a briefing with reporters at the automaker's Detroit headquarters.

DiGiovanni said GM's October U.S. auto sales were on track for the automaker to show its first year-over-year sales increase since January 2008. "This would be a really positive sign for GM," he said.

"We're really having a good October. We're not out of the woods. We're not declaring victory. But it looks like October could conceivably be our third straight month of market share increase," DiGiovanni said.

DiGiovanni said GM expected that 95 percent of its October sales would come from the four brands that it is keeping after a bankruptcy restructuring financed by the U.S. government.

GM is keeping its Chevrolet, Cadillac, Buick and GMC brands. A year earlier, only 85 percent of GM's sales had come from those brands. The remainder of sales had come from brands that GM is dropping as it restructures: Pontiac, Hummer, Saturn and Saab.

DiGiovanni said full-year 2009 U.S. auto sales were on track through October to hit the 10.5 million rate the automaker had forecast in December as it began discussions with the U.S. Treasury on a bailout.

Industry-wide U.S. auto sales are down 27 percent this year and at the lowest level since the early 1980s.

DiGiovanni said GM was encouraged by signs of a recovery in U.S. corporate profits, more normal credit markets and a stabilization in consumer confidence.

Industry-wide U.S. auto sales for October are on track to hit 10.5 million units, he said.

That would be the higher than the 9.2 million sales rate for September and the highest rate of 2009 with the exception of July and August when sales were sharply boosted by the U.S. government's "Cash for Clunkers" trade-in incentives.

"The industry is getting some legs under it without the stimulus of Cash for Clunkers. That said, this isn't great," DiGiovanni said. "These are still levels we haven't seen since the early 1980s."

GM expects to have a U.S. market share of between 20 percent and 21 percent for October, making it the U.S. market-share leader with a 3-percentage-point lead over its nearest competitor Toyota Motor Corp.(7203.T)

(Reporting by Kevin Krolicki; Editing by Derek Caney)