Disappointing sales from automakers in October show that it may still be too early to back away from aggressive buyer incentives.

General Motors

(GM) - Get Report

and

Ford

(F) - Get Report

said car sales declined 7.2% and 1.9%, respectively, in October. Analysts had expected sales at GM to fall just 2.9%, while Ford was projected to increase sales by 4.3%.

Only

Chrysler

(DCX)

was able to post a gain, thanks to a 46% surge in sales of its Dodge Ram vehicle. The company said overall sales rose 11% in October.

Charles Brady, an analyst at Credit Lyonnias Securities, expected sales to slow down in October. "Inventories for the 2003 model year were meaningfully reduced in August and September, while 2004 model incentives were considerably lower than what consumers had grown accustomed to," he said in a recent research note.

Brady said he expects auto manufacturers to increase incentives going forward "just to maintain trend-line sales."

Although analysts were expecting the slowdown, after a very strong period in July and August, the numbers still came as a surprise. GM said car sales fell 6% in October to 142,669, while total truck sales dropped 8% to 220,374. The company raised its fourth-quarter vehicle production target for North America by 10,000 units, to 1.36 million, including 553,000 cars and 807,000 trucks. GM sold 363,043 vehicles last month.

"GM's sales in October fell short of our objectives, partially due to a smaller industry than expected and in part due to a slight hangover from our very strong performance in the third quarter," said John Smith, group vice president of GM vehicle sales, service and marketing.

Ford Motor said truck sales rose 2.2% to 187,402, while car sales fell 9.1% to 95,066. Sales of the all-new 2004 F-150 model were 65% higher than in September, which was the truck's introductory month. Overall, Ford said, customers purchased or leased 282,468 vehicles.

Chrysler said total car sales fell 11% to 29,317, but truck sales surged 17% in the month to 136,945. Analysts had expected sales to rise 9.8% because the firm had higher incentives on 2004 models than its competitors. Overall, Chrysler sold 166,262 vehicles last month.

Automakers estimated that U.S. sales of cars and trucks ran at a seasonally adjusted annual rate of about 15.7 million vehicles. That's down from a rate of 16.7 million in September and 19.0 in August. Analysts were calling for a rate of 16.1 million.