UPDATE 1-GM sales up in Feb. as industry wobbles

* Overall GM sales up 11.5 percent, core retail up 7 pct

* GM estimates winter storms cut overall sales by 5 pct

* Fleet sales more than double, gain almost 115 pct

DETROIT, March 2 (Reuters) - General Motors Co [GM.UL] on Tuesday posted a nearly 12 percent gain in U.S. February sales, boosted by a doubling in sales to fleet operators and relatively strong demand for newer crossovers like the Chevy Equinox.

Retail sales for GM’s core brands -- Chevrolet, Buick, GMC and Cadillac brands -- were up 7 percent from a year earlier when U.S. auto sales were near the bottom of a punishing slump and the automaker was sliding toward bankruptcy.

The February result marked the fifth consecutive month that GM’s four remaining brands posted a retail sales gain, but the automaker said a still-weak market for housing and jobs represented a threat to recovery for the auto industry.

But industry-wide sales for February proved weaker than most analysts had expected in projecting a limited recovery in 2010 starting in the first quarter.

Mike DiGiovanni, GM’s sales analyst, said the automaker believed that winter storms across the United States had reduced industry-wide sales by about 5 percent in February.

In addition, he said that the ongoing recalls at Toyota Motor Corp 7203.T had put a damper on overall auto sales in February.

DiGiovanni said GM still believed that the U.S. economy was on track for a gradual recovery with annual sales expected to hit a range of 11.5 million to 12 million vehicles in 2010.

That would be up from an estimated total of 10.7 million in February, including medium-duty work trucks, he said.

“We see the primary risks in housing and employment,” DiGiovanni said on a conference call to discuss the sales results. He called U.S. consumer confidence “tepid.”

Overall sales for GM’s mainstay brands -- Chevrolet, Buick, GMC and Cadillac -- were up 32 percent.

Fleet sales to operators including rental car agencies more than doubled from a year earlier, increasing almost 115 percent.

Sales of the brands GM has dropped through its U.S. government funded restructuring -- Hummer, Pontiac, Saab and Saturn -- were down 86 percent as dealers sold off remaining inventory.

Those four brands GM has closed or sold off now represent just over 2 percent of the automaker’s total U.S. sales.

GM pointed to success in reducing costly sales incentives and increasing pricing, a key to its strategy of becoming profitable at smaller sales levels.

The automaker said its average transaction price was up $4,000 in February compared to a year earlier. At the same time, GM reduced sales incentives, which were just $200 above the industry average in February, executives said.

Reporting by Kevin Krolicki, editing by Dave Zimmerman