General Motors' surprise 3.7% sales gain for February, while Detroit arch-rival Ford continued to tumble and Chrysler lost ground, was a surprise and suggests the world's biggest car maker might "have started to turn a corner", Global Insight analyst Aaron Bragman said in a research note late on Friday.

"February came in generally as expected, with the outlook for the year unchanged after the completion of the second month," he wrote.

"The biggest concern is Ford, which is missing internal sales targets, and has yet to publicly come up with a plan to restore confidence in the Way Forward turnaround," Bragman added, noting that the overall US market was flat, posting a 0.5% year on year reduction last month, and is off 2.4% year to date.

GM posted a surprising gain for the month despite a reduction in fleet sales, prompting hope that it may have started a rebound in what is traditionally a soft month.

According to the analyst, roughly half of Ford's drop came from the reduction in sales to daily rental fleets, and was anticipated with the loss of the Taurus and Freestar volume. The remainder came in retail sales reductions, which the company admits are not meeting targets.

For the two months of 2007, Ford sales are off 16.0%, slightly worse than expectations or what can be accounted for through fleet volume reductions. A few bright spots were present, as the Fusion/Milan/MKZ sedan trio continues to post strong sales, and sales of the Ford Edge/Lincoln MKX crossover-utility vehicles (CUVs) also remain strong.

Bragman said sales of mid-size sedans (Chevrolet Impala, Pontiac G6, and Saturn Aura) gave GM a 25% improvement in that segment's performance for the company while the redesigned Chevrolet Silverado and GMC Sierra pick-ups helped post a 29% improvement in full-size truck sales. GM also claimed a 17% improvement in sales of the subcompact Aveo.

The reduction in truck and sports-utility vehicles (SUV) sales hit Chrysler Group with an 8% decline in sales - the Ram pick-up was off 4% for the month, the Caravan minivan fell 7%, and the Durango SUV tumbled 43%. But bright spots included the just-redesigned Wrangler SUV's best-ever February, with sales up 63% to just shy of 10,000 units, thanks to the continued popularity of the four-door model, and continued strong sales of the Caliber, Compass, and Nitro "[that] lend credence to Chrysler's contention that new models will power their turnaround".

"Seemingly nothing can stop Toyota's climb, as the company posts another 12.2% sales gain for February and a YTD hike of 10.9%," Bragman wrote, noting that February is typically a difficult month in the US auto market, being shorter than average and typically suffering from the effects of winter weather across much of the country.

"Given those limitations, the results seen for the month were not terribly different than were anticipated," he said.

"The retail increase in February surprised everyone, as most analysts felt that GM would continue to feel the slump that the other domestic automakers are experiencing.

"But with the continued insistence on record sales fuelling a profitable fourth quarter of 2006 (unconfirmed, as the automaker has yet to release its 2006 full-year report), and now an unexpected 3.7% improvement in what is typically a soft month for the market, many are hoping that GM's turnaround may be starting to gain traction with consumers.

"Much is still left to prove, however, as the vehicles developed purely under the watch of vice-chairman Bob Lutz have yet to hit the market. If GM can profitably start reversing its sales slide now, when the highly anticipated Lutz vehicles hit the market, the sales prospects for GM should brighten even further."

But he cautioned that Ford is having issues that it seems to be struggling to address.

Bragman highlighted a quote from Mark Fields, Ford's president of the Americas: "Our objective is to deliver more of the products that people want and, in doing so, stabilise retail share. We're encouraged by the results we have achieved over the past several months. Our new products and our initiatives to strengthen our brands are starting to pay off."

"How Fields comes to this conclusion based on the multiple months of repeatedly missing internal sales targets and company surveys that show employee morale and confidence in the turnaround as waning is puzzling," the analyst wrote.