* GM sales up 1.1 pct, confounding expectations of a decline
* Automakers see shift to compact cars as gas prices spike
* February sales helped by rising consumer confidence
* Chrysler US sales up 40 pct in Feb, Ford up 14 pct
* Annual sales rate jumps to 15.1 mln, vs expected 14 mln
By Deepa Seetharaman and Ben Klayman
DETROIT, March 1 U.S. auto sales rose
nearly 16 percent in February and the annual sales rate leapt to
its best level in four years, helped by a surprising sales gain
by General Motors Co and strong results from Chrysler
Group LLC and Ford Motor Co.
For a second month in a row, sales surpassed even the most
optimistic expectations. Analysts ascribed the gains partly to
rising consumer confidence and upbeat U.S. economic data.
"That in itself is probably a big green-light indicator for
consumers," said TrueCar.com analyst Jesse Toprak. "It's telling
them it's OK to buy a car. You'll be fine."
The annual sales rate, a closely watched industry yardstick,
jumped to 15.1 million vehicles, according to Autodata, the best
monthly showing since February 2008, before the financial crisis
that sent Detroit into a tailspin.
Analysts had expected an annual pace of 14 million vehicles,
with the high estimate at 14.4 million.
Vehicle sales rose 15.7 percent to more than 1.1 million.
The gains came even as fuel prices shot up 30 cents a gallon
last month, which spurred compact car sales. Sales of Ford's
Focus small car more than doubled in February.
Toprak said the wider availability of financing last month
helped some consumers offset the rising cost of fuel. American
drivers also sought to replace their aging vehicles, which
contributed to the better-than-expected sales performance.
"There are a number of factors that are helping release this
pent-up demand," GM's U.S. sales chief, Don Johnson, told
analysts on a conference call. "Perhaps the most encouraging
sign is that home builders are becoming more optimistic."
Some analysts and industry executives have said that the
U.S. auto sector will not recover significantly until U.S. home
prices pick up and consumers feel more prosperous.
The auto industry is now in its third year of a fitful
recovery from a severe slump that led to the bankruptcies of GM
and Chrysler in 2009. The U.S. industry was selling nearly 17
million vehicles a year on average in the 10-year period ending
Last year, the industry sold 12.8 million vehicles.
NO 'MASS DEFECTION' FROM TRUCKS
Short-term fluctuations in fuel prices will not hurt demand
for new vehicles this year, but they could influence consumer
preferences on what types of cars to buy, analysts said.
Analysts are watching gasoline prices, which early last year
contributed to a softening in the economy that nearly pushed it
back into recession.
Chrysler posted a February U.S. sales increase of 40 percent
compared with the year-ago period. Ford saw a 14 percent rise,
Volkswagen AG was up 42.5 percent, Kia Motors Corp
gained 37.3 percent and Nissan Motor Co Ltd
was up 15.5 percent.
But sales of trucks and sport-utility vehicles were better
than expected in February, analysts and executives said.
This is in stark contrast to spending habits in 2008 when
average gasoline prices first topped $4 a gallon, spurring a
"mass defection" from trucks to smaller cars, said Al
Castignetti, head of the Nissan brand in North America.
"Every time it happens, up until this point, we've seen the
exodus," he said. "Is the American public being conditioned to
accept higher gas prices?"
Auto sales are watched as one of the earliest indicators of
U.S. consumer demand and the willingness of Americans to finance
U.S. auto sales have benefited in recent months from
consumers' need to replace aging vehicles, which many delayed
during the depths of the economic downturn. The average vehicle
on the road is a record 10.8 years old.
GM sold 209,306 vehicles last month, up 1.1 percent from the
previous February. Analysts had predicted a decline in GM sales
as the No. 1 U.S. automaker offered fewer incentives compared
with a year earlier.
Ford sold 179,119 cars and trucks in February, while Toyota
Motor Corp sales rose 12.4 percent to 159,423 vehicles.
Chrysler, the U.S. automaker majority-owned by Fiat SpA
, sold 133,521 cars and trucks last month. Volkswagen
sold 30,577 vehicles, and new vehicle sales at Nissan rose to
106,731 last month.
GM shares gained 1.7 percent to close at $26.47 on Thursday,
while Ford shares were up 2.3 percent to $12.66.