GM sees October sales bounce, Chrysler plunges

By Soyoung Kim and David Bailey

DETROIT (Reuters) - General Motors posted its first monthly sales increase in nearly two years on Tuesday as a rebound in industrywide U.S. auto sales in October pointed toward a gradual recovery for the battered sector.

Chrysler was the weakest of the large automakers. Its sales plunged 30 percent in October, the day before Fiat SpA Chief Executive Sergio Marchionne releases a five-year turnaround plan for Chrysler.

U.S. auto sales hit an annualized rate of 10.46 million units in October, according to industry tracking firm Autodata.

That is a level not seen in a year, except for July and August when the U.S. government's "cash for clunkers" incentives program sparked a surge in sales.

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"In a nutshell, we can tell with confidence that we've seen the worst already past and we are seeing relative improvements in the market place and consumer demand," said Jesse Toprak, analyst with Truecar.com.

However, high unemployment and weak consumer confidence will slow the recovery, he said. "The improvement in the automotive market for the rest of the year as well as next year will not be as fast or robust as we thought earlier this year."

The October sales are a key indicator because they are the first month of U.S. sales not affected by the clunkers boom, which provided incentives of up to $4,500, or the backlash that followed in September.