WASHINGTON (AFP) - The US auto market steadied in October, recovering from the end of government trade-in incentives despite a dismal month for the struggling Chrysler Group, monthly sales data showed Tuesday.

Overall new US vehicles sales hit an annual pace of 10.46 million -- up sharply from 9.22 million in September but below the October 2008 level of 10.82 million, according to market research firm Autodata Corp.

The big US automakers saw a mixed month, with General Motors and Ford Motor Co. improving modestly and rival Chrysler suffering a sharp year-over-year drop of 30 percent.

Jessica Caldwell, analyst at Edmunds.com, said that Chrysler, set to unveil future plans Wednesday, is "in desperate need of a new message."

"They are still struggling with a lot of carryover products, they have nothing new in their arsenal," she said.

"What they are doing, it is not working."

Chrysler Group reported total US sales for October of 65,803 units, down 30 percent from a year earlier. Despite the year-over-year drop, the figure was up six percent compared with September.

The new Chrysler is an alliance with Italy's Fiat, which took a stake in the number three US automaker under a government-backed bankruptcy reorganization.

Chrysler announced it would offer zero percent financing on many cars along with other incentives in November as part of its effort to spark more sales.

"The industry showed signs of improvement this month with increasing sales, which is a trend we expect to continue for the remainder of the year," said Chrysler executive Fred Diaz.

"Chrysler Group expects to get its fair share of the increases as November and December traditionally are two of the best months for SUV (sport utility vehicle) sales, and the Jeep brand offers customers the best SUVs in the marketplace."

GM said it sold 177,603 new vehicles in the month, up four percent from last October, the company's first year-over-year gain since January 2008.

Sales were up 13 percent from September, which saw a pullback in car buying following the end of government incentives for trade-ins under the "cash for clunkers" program, which ended in August.

GM, which like Chrysler underwent a bankruptcy restructuring with US government support, said it was pleased with the performance of its four core brands, which accounted for about 95 percent of GM's retail sales.

"We're very pleased with consumer acceptance to our newest cars, crossovers and trucks," said Susan Docherty, GM vice president for US sales.

Ford said US sales rose 3.1 percent from a year ago, the third increase in the past four months for the number-two automaker. Total sales of new cars under the Ford, Lincoln, Mercury and Volvo brands rose to 136,920 last month.

The figure was up 21 percent from September.

Ford said its retail market share was up for the 12th time in 13 months, helped by the new Taurus sedan and increased sales of its "crossover" sport utility vehicles.

Ken Czubay, Ford vice president, said: "Ford vehicles are among the 'freshest' available by any automaker -- with more than 80 percent of our sales in October coming from our new 2010 models."

Ford, the only one of the Big Three US automakers to avoid bankruptcy and a government bailout, on Monday posted surprise earnings of nearly a billion dollars for the past quarter and said it was on track to become "solidly profitable" by 2011.

Dana Johnson, chief economist at Comerica Bank, said the auto sector is rebounding from a horrific slump that began in late 2008.

"I think we're seeing overall a gentle reacceleration of car purchases," he said.

"It's hard to tell now how good a bounce it will be because of the volatility created by the 'cash for clunkers' program. But there is a bit of an uptrend."

Johnson said the auto sector is participating in a manufacturing recovery as the economy pulls itself out of recession.

"It's too early to tell what kind of a recovery we're going to have but I think the recovery in manufacturing will accelerate further once we see job growth in the overall economy," he said.

"It will be part of a pattern of a self-reinforcing recovery that will be more evident by the time we get to the first quarter of 2010."