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Sales raise automakers' recovery hopes

DETROIT (AP) — Toyota's recalls and East Coast snowstorms weighed down US auto sales in February, but automakers remained optimistic that a recovery is under way.

General Motors Co.'s February sales rose 11.5 percent thanks to new models and pent-up demand from rental-car companies and other fleet buyers. It was unclear how much the Detroit automaker benefited from Toyota's safety woes.

GM yesterday said sales of its Buick, Chevrolet, Cadillac and GMC brands climbed 32 percent. GM plans to keep those four brands and is phasing out Pontiac, Saturn and Hummer. It has sold Saab.

The industry was expecting to see gains over February 2009, which was one of the weakest months in a very depressed year. Sales over President's Day weekend — which traditionally kicks off the spring selling season — were robust, according to the auto information site Edmunds.com.

Still, winter storms at the beginning and end of the month hurt sales on the East Coast and in the Midwest. GM said its sales dropped 22 percent in the Northeast region. The corridor from Boston to Washington typically accounts for about a quarter of the automaker's US sales.

"Three and a half feet of snow on these cars. It took our dealers a bit of time to get all that snow off here and get the customers back into the showrooms," said Susan Docherty, GM's vice president of sales and marketing.

Mike DiGiovanni, GM's top sales analyst, said sales probably would have been five percent higher had it not been for snowstorms. That means the gradual economic recovery is continuing despite setbacks in home sales, new home construction and unemployment, he said. Consumer confidence — which is measured by how much buyers spend — took an unexpected dive in February, indicating people are nervous about the economy.

GM said much of the sales increase was due to sales of large new wagons such as the Chevrolet Equinox, which jumped 133 percent, and the Cadillac SRX, which saw sales more than quadruple. Those two models are the size of SUVs but are built on a car frame for better fuel economy.

Sales to rental car companies and other fleet buyers also were strong as companies began buying again after cutbacks last year. Fleet sales generally mean lower profits to automakers than retail sales to individuals.

Retail sales for GM's four core brands edged up seven percent.

Surging sales of large wagons also helped Japan's Subaru, which said its February sales in the US jumped 38 percent to 18,098 led by the Outback and Legacy sedan. Both vehicles got a redesign for the 2010 model year. Sales of its Impreza sedan and Forester SUV were flat.

How much GM and other automakers gained from Toyota Motor Corp.'s recalls remained a question. February was the first full month since Toyota's January 26 decision to halt sales of eight popular models in the US because of safety concerns. Those cars went on sale again as dealers repaired them, but Toyota's image suffered from the recall of millions of vehicles and congressional hearings on its safety record. Analysts were expecting Toyota to see a double-digit drop in sales for the month.

Honda Motor Co., Hyundai Motor Co., Kia Motor Co. and Ford grabbed the most sales from Toyota in February, according to Jesse Toprak, vice-president of industry trends and analysis at TrueCar.com, an auto pricing site. Most automakers offered deals to Toyota customers who traded in their vehicles or raised incentives in February to compete for those buyers.