Auto sales rose about 20 percent in April from recession-stunted results a year earlier, reflecting a still-gradual recovery in the economy.

However, the figures were not as robust as some had hoped, particularly given incentives and a slew of economic data that suggest an economy on the mend after the deepest downturn since the depression of the 1930s.

Overall, the U.S. economic recovery would appear to be on track, however the pace isn't expected to be as robust as compared to other post-war recoveries -- kind of a slow and steady sort of scenario, GM Vice President of U.S. sales Steve Carlisle said on a conference call.

Toyota Motor Corp sales rose more than 24 percent, a weaker-than-expected result, and the automaker extended record company incentives for a third consecutive month to jump-start sales that had tumbled earlier in the year due to massive safety recalls.

Nissan Motor Co Ltd posted the largest percentage gain at 35 percent, followed by Hyundai Motor Co at 30 percent and Ford Motor Co and Chrysler at 25 percent.

U.S. auto sales slipped by about 8 percent in April from March, about what industry executives had expected with a slight pullback on incentives overall, but all the largest automakers posted sales increases over a year earlier.

General Motors Co posted a 6.4 percent sales increase from a year earlier, but held its position as the No. 1 seller in the United States by a wide margin in April over Ford. Toyota was third.

Excluding its discontinuing brands, GM sales rose 20 percent in April from a year earlier when the auto industry was bracing for bankruptcies by GM and Chrysler.

Chrysler filed for bankruptcy at the end of April 2009 and is now under management control of Italy's Fiat SpA. GM followed with a government-funded bankruptcy a month later.

We are putting the fundamentals together for a full-blown recovery, TrueCar.com analyst Jesse Toprak said, adding that April sales showed another month in a slow return in consumer demand that was demolished in the past two years.

Ford, whose shares ended 2.2 percent higher at $13.30 on the New York Stock Exchange on Monday, said F-Series pickup truck sales rose 42 percent and Escape SUV sales rose 41 percent.

S&P equity analyst Efraim Levy said in a note that the slowdown in Ford's sales from a 43 percent year-over-year rise in March was something to watch. He has a hold rating on Ford.

ECONOMIC RECOVERY STILL KEY

Honda Motor Co Ltd, No. 4 in the United States by vehicles sold and the most closely shopped brand to Toyota, reported a 12.5 percent sales increase as its incentives trailed Toyota's by some $700 per vehicle, according to Edmunds.

Hyundai set a sales record for the month of April and when combined with its smaller affiliate Kia Motors took No. 6 in U.S. sales from Nissan.

The U.S. results follow a sharp jump in April sales in Spain that was supported by government incentives to scrap older vehicles, and a slight 1.9 percent car sales increase in France where such incentives were pared.

Automakers pulled back about 5 percent on discounts in April from March overall, according to Edmunds. Toyota trimmed incentives 9 percent from the prior month, but April discounts were still up 50 percent from a year earlier.

Toyota continues to buy its market share, IHS Global Insight analyst Aaron Bragman said.

Toyota U.S. brand chief Bob Carter said it would maintain aggressive discounts in the near term as they aim to rebuild the brand to remove any cautions consumers have.

We're going to do what it takes to keep ourselves competitive in an improving but challenging market, Carter said.

Hyundai, Ford and GM had sales momentum that allowed them to trim incentives and let their products sell themselves, Edmunds.com senior analyst Michelle Krebs said in a statement.

Automakers are still counting on a broad U.S. economic recovery to lift sales rather than costly incentives that hurt profit margins and used car prices.

In the seasonally adjusted annualized rate economists track, U.S. auto sales were about 11.2 million in April, down from the 11.8 million rate in March, but far above the April 2009 rate of 9.23 million, according to Autodata Corp.

The industry in 2010 is expected to snap a four-year drop in U.S. auto sales that reached 10.4 million vehicles in 2009, the lowest total since the early 1980s even without adjusting for population increases.

The first four months of the year have seen U.S. industry sales just below Ford's 2010 forecast range of 11.5 million to 12.5 million vehicles including medium and heavy trucks and a gradual increase in the pace of sales is expected.

Given the economic momentum, I would be very surprised to see the sale pace tail off, Ford economist Emily Kolinski Morris said on a conference call.

U.S. auto sales were nearly 17 million vehicles in 2005 and industry experts believe a rebound to the 16 million vehicle range last reached in 2007 could take several years.

(Reporting by David Bailey, Soyoung Kim and Bernie Woodall, editing by Matthew Lewis)

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