The pickup truck Ram brand led the group with a 38 percent increase in sales during the quarter compared with the same period a year earlier while Jeep rose 34 percent, according to information released in Fiat SpA’s quarterly earnings report Wednesday. Dodge vehicle sales rose 24 percent but the Chrysler brand fell 9 percent during the quarter. Details about the decline weren’t immediately disclosed, The Wall Street Journal reported.

Fiat, which owns a stake in and has management control of Chrysler, also said the U.S. auto maker’s retail sales increased 51 percent during the quarter. Chrysler is expected to release its first quarter results next month although a date has yet to be announced.

The stronger first-quarter performance provides a boost to Chief Executive Sergio Marchionne’s goal of increasing Chrysler’s worldwide sales to 2 million vehicle this year. The auto maker sold about 1.5 million cars and trucks last year.

Italy’s biggest industrial group is also working to raise about 1.5 billion euros ($2.17 billion) through a credit facility and is expected to launch the deal in coming months, according to one of the people familiar with Fiat’s thinking.

The credit facility is planned for the Italian automaker’s general liquidity purposes and is expected to remain undrawn, reported Reuters.

Fiat, which currently holds a 30 percent stake in Chrysler, aims to obtain majority control of the U.S. automaker by the end of 2011 – one of Chief Executive Sergio Marchionne’s overarching goals as he tries to integrate the two car companies.

As part of the 2009 bailout deal agreed with Washington, Fiat was given management control and a minority stake in Chrysler. Under the terms of the U.S. Treasury agreement, Fiat can exercise an option to buy a 16 percent stake in Chrysler if the loans it owes the U.S. and Canadian governments fall below $4 billion.

People familiar with the matter told Reuters on Thursday that Chrysler is close to launching a debt refinancing package to repay all of its roughly $7 billion owed to the U.S. and Canadian governments and the deal could be completed by June.

Repaying the loans stemming from its historic 2009 bailout would mark a critical step for Chrysler as the No.3 U.S. automaker tries to distance itself from the controversial rescue by the Obama administration and rebuild consumer confidence in the brand.

A financial integration of the two automakers, both of which struggled in their own markets, could also make Chrysler a better story for potential stock investors when the company eventually goes public later this year or next.

Chrysler’s initial public offering, which was originally expected to take place in the second half of this year, could be pushed into 2012 as Fiat first wants to secure majority control of the U.S. automaker, a possibility Marchionne suggested in late March.

But before Fiat can take control, Chrysler must repay its loans to the U.S. and Canadian governments in full.

Chrysler owes $5.8 billion to the U.S. government and $1.3 billion to the Canadian government, according to the company’s fourth-quarter earnings release.

In a research note Friday, Banca IMI estimated that Fiat could buy the 16 percent stake in Chrysler for between 1 billion and 1.2 billion euros ($1.4 billion to $1.7 billion).

“There’s a lot of different ways to look at the valuation but it would be in the right ballpark,” one of the sources said of the $1.5 billion valuation of that option.

Fiat declined to comment on the cost of the additional 16 percent in Chrysler and on the planned credit facility. The sources asked not to be identified because they were not authorized to speak with the media.

Chrysler has selected four banks to spearhead the debt refinancing deal and is aiming to launch the debt offering after Chrysler reports first-quarter earnings, likely in May, sources said this week.

Marchionne, the Italian-Canadian who runs both Fiat and Chrysler, said earlier this week Chrysler would refinance the government debt by June.

The delay also is a serious blow to Alfa in Europe because without the Giulia mid-sized sedan and station wagon the automaker will have one of the weakest premium brand lineups in Europe.

Alfa parent Fiat S.p.A. has pushed back the arrival of the Giulia models to mid-2013 from late 2012, the sources said. They blamed the delay on manufacturing and styling issues with the cars, adding that Marchionne was not pleased with proposals he has seen from Alfa’s creative team in Turin.

A Fiat spokesman declined to comment when asked about the delay.

Another factor slowing the Giulia’s launch, the sources said, is that Marchionne is not happy with the design proposals he’s seen from Chrysler’s U.S.-based stylists in Auburn Hills, Michigan, for the Giulia’s two siblings, the replacements for the Chrysler 200 and Dodge Avenger, which are due in 2013. The timing of the three mid-sized models is linked because they will share a platform, powertrains and major subsystems.

Fiat owns 25 percent of Chrysler Group and is working to integrate the Italian and U.S. automakers.

With the Giulia stalled, the next all-new Alfa that European dealers will get is a compact SUV, which Fiat will start building at the end of next year in at Mirafiori plant in Turin. Code-named C-SUV, the model will be based on the replacement for the Jeep Compass/Patriot, which also will be produced in Mirafiori both for Europe and North America.

Until the SUV arrives in late 2012 to early 2013, Alfa will have just three model lines to sell, the MiTo, Giulietta and 159.Even struggling Saab, with two sedans (the 9-3 and 9-5) and two SUVs (the 9-4X and 9-7X, which has been discontinued but still shows up in Saab’s European sales results), has a broader lineup than Alfa.

By comparison, Europe’s best selling premium brand, Audi, offers 11 model lines. Because of its broader product lineup and more global reach, Audi reported worldwide March sales of 125,700 cars and SUVs. That is 11 percent more than Alfa’s total global sales for all of 2010.

A reason that Alfa’s portfolio is so depleted is because at the end of last year it stopped making the four-seat GT coupe, 2+2 Brera coupe and the two-seat Spider roadster. The earliest any of those will be replaced is 2013.

Philippe Houchois, head of European auto research at UBS in London, said Alfa has suffered from a lack of new products before.

This has contributed to the automaker’s huge operating losses, which Houchois estimates equaled 15 percent to 20 percent of the Alfa’s annual revenues – or about 300 million to 500 million euros a year – in the mid-2000s.

He believes Alfa’s loses are now equal to about 10 percent of revenues – about 200 million euros – a year because its younger lineup includes the 1-year-old Giulietta and the 3-year-old MiTo.

Fiat does not release financial results by brand and declined to comment on the accuracy of Houchois’ estimates.

Houchois said that the only way Alfa will make money in the future is if Fiat and Chrysler continue to increase their parts sharing, which will create more economies of scale.

Despite its small lineup, Alfa aims to boost its 2011 sales to 170,000 from 112,000 last year. Alfa expects to sell 100,000 units of the Giulietta compact, 60,000 MiTo subcompacts and 10,000 159 mid-sized cars this year.

It remains unclear where the Giulia will be built.

In a presentation to bond holders held on March 29, Marchionne showed a slide that said the Giulia sedan and wagon, which will replace the 159 sedan and Sportwagon, would be made in the United States starting in 2013. A year ago that slide, which was part of Fiat Group’s presentation of its five-year strategic plan, showed the Giulia models being built in Italy and debuting in North America in late 2012 as part of the brand’s return there.

The Fiat spokesman now says the company still needs to decide where the make the Giulia.

In December 2010, Marchionne said “I wouldn’t be surprised to see an Alfa” come off the line at Chrysler’s plant in Sterling Heights, Michigan.

Sterling Heights, which was once scheduled for closure at the end of 2012, makes the 200 and Avenger.

Alfa Romeo pulled out of the U.S. market in 1995 and has been mulling a return since 2000. The sporty brand failed to meet Marchionne’s global sales target of 300,000 by 2010. Alfa’s new target is even tougher – 500,000 sales by 2014 – including 85,000 units a year in North America.

Bernstein Research analyst Max Warburton doubts that Alfa will be able to achieve its sales goal.

“The Alfa plan looks more and more overambitious by the day,” he said in an e-mail reply to questions. “With just the Mito and Giulietta in the next few years, there’s probably not a robust enough platform of customers and dealers to power up to 500,000 units. Conquest sales in Europe and the U.S. will need to be massive to hit the target.”

Other issues that Warburton sees are the massive product development costs that Alfa faces to expand its model range and the high price it will have to pay to build a U.S. dealer network.

“Entering a new market means losing money for some years,” he replied. “And we all know conquest sales even in existing markets like Europe are horrendously expensive to achieve.”

Kia, Chrysler and Hyundai posted some of the biggest gains as the industry marked its seventh straight monthly advance of 10 percent or more. The seasonally adjusted annual sales rate of 13.1 million was the second highest since the cash-for-clunkers incentives of 2009, reported Automotive News.

“We believe the industry and economy are moving in the right direction,” said Bob Carter, general manager of the Toyota division.

The March results topped most analysts’ forecasts, while some said the parts shortages and plant closings caused by the March 11 quake would begin to take a toll on sales this month.

Ford Motor Co. outsold rival General Motors in the United States last month for the second time since 1998. Ford was aided by a 21 percent jump in truck sales. Its overall gain of 16 percent was its biggest this year.

Ford last outsold GM in February 2010 and before that, July 1998, when GM was hobbled by a strike at former parts unit Delphi.

Chrysler Group said its March sales rose 31 percent to the highest level in three years, with Dodge brand sales jumping 50 percent.

Among major automakers, only Toyota Motor Corp. lost ground last month. Its sales fell 6 percent in comparison to March 2010, when it recorded a 41 percent increase while fighting back from its recall crisis.

Nissan Motor Corp. posted a 27 percent increase in monthly sales before announcing its U.S. plants will close for six days this month because of parts shortages.

American Honda sales rose 24 percent on a 25 percent jump in Honda brand volume. Kia said March sales rose 45 percent, helping it sell more than 100,000 units in a quarter for the first time.

Industry sales are now up 20 percent this year.

March’s seasonally adjusted annual sales rate of 13.1 million marked the sixth consecutive month the SAAR has topped 12 million vehicles. The figure is up from a SAAR of 11.78 million a year earlier but down from February’s 13.4 million.

Ford’s March results were driven by higher fleet sales, strong F-Series demand and record monthly sales of the Fusion and Escape. Fiesta sales reached 9,787, up 56 percent over February, the automaker said.

The Ford division posted a 28 percent jump in sales, offsetting a 2 percent decline in volume at Lincoln. Ford’s F-Series truck lineup – featuring more fuel efficient powertrains for 2011 – posted sales of 53,272, up 25 percent compared to a year ago.

“The No. 1 unmet need for full-size pickup truck owners has been fuel economy,” Doug Scott, marketing manager for Ford’s truck line, said in a statement.

Ford said its retail sales – a key measure of consumer demand – rose 14 percent. Fleet sales were up 29 percent, with commercial sales up 50 percent, government demand up 33 percent and daily rental volume up 13 percent.

GM, which outperformed the overall U.S. market in January and February, is still ahead of Ford in year-to-date sales by more than 97,000 units. It has been the U.S. sales leader on an annual basis since 1931.

New models such as the Chevrolet Cruze and healthy demand for fuel efficient cars and crossovers helped GM post a 10 percent gain in March sales.

The automaker said car sales rose 15 percent, while crossover demand jumped 30 percent and big pickup sales jumped 11 percent.

It was the 7th consecutive monthly sales gain for GM, but the advanced trailed increases posted in January and February as the automaker reduced discounts.

GM’s average incentive dropped 17 percent to $3,109 per vehicle last month from February levels, online shopping guide TrueCar estimated.

GM said retail sales advanced 17 percent compared with March 2010.

Combined retail sales of models launched since June 2009 – including the Chevrolet Equinox, Cruze and Volt; Buick Regal; GMC Terrain; and Cadillac SRX – advanced 54 percent last month and rose 74 percent during the first quarter, GM said.

Fleet sales represented 24 percent of GM’s sales volume during the first quarter, compared with 30 percent in the first quarter of 2010.

“Our plan was to get out of the gates quickly in the first quarter and we succeeded,” Don Johnson, head of GM’s U.S. sales operations, said in a statement.

Rising gasoline prices and manufacturing disruptions caused by the Japanese earthquake, tsunami and nuclear crisis could slow the industry’s ongoing sales recovery during the spring selling season, analysts say.

And while credit markets continue to thaw, making it easier for consumers to finance new vehicle purchases, new vehicle demand is still being hampered by high unemployment and a weak housing market.

The Labor Department reported today that employers added 216,000 jobs in March, slightly above forecasts and a fresh sign hiring is gaining momentum.

TrueCar.com estimates the industry’s average incentive per vehicle dropped 6 percent from February to $2,432 last month. In March 2010, industry discounts averaged $2,798 per vehicle.

Last year, light-vehicle sales climbed to 11.6 million units from a 27- year low in 2009. But sales volumes remain about 31 percent below the 16.8 million-unit annual average from 2000 to 2007, according to Autodata Corp.

The rise in oil and gasoline prices is drawing buyers away from light trucks and into smaller cars, analysts said.

In a recent report, J. P. Morgan analyst Himanshu Patel said that each $1 increase in the U.S. retail price of gas results in a 5 percentage-point shift toward lower-margin cars for automakers.

U.S. gas prices rose more than 3 cents to $3.60 a gallon over the last week, and have climbed by 80 cents from a year ago, the Energy Department said this week.

“With gasoline prices eclipsing $3.50 a gallon, consumers are placing a high priority on fuel efficiency in every size and kind of vehicle,” said Ken Czubay, head of U.S. marketing and sales at Ford.

Political turmoil in the Middle East has sent the cost of crude oil to above $100 a barrel.

“When there is unrest, consumers tend to take a wait and see approach to purchasing big ticket items,” Jesse Toprak, an analyst with TrueCar.com, said last week.

The aftermath of the Japanese earthquake and tsunami last month is also expected to dampen supplies and sales of select models in coming weeks.

“For the most part our product inventory levels are very good at 352,000 vehicles,” said Toyota’s Carter. “While there may be spot shortages here or there, we are prioritizing distribution efforts to minimize those shortages.”

Toyota said today is was scrapping all incentives on the Prius hybrid for April. Because of disruptions in Japan and rising demand, Toyota is down to an 18-day supply of the Prius, but the automaker said it does not expect to run out.

“The uncertainty surrounding future production and vehicle availability may limit dealers’ willingness to provide additional discounts on top of OEM incentives,” analyst Richard M. Kwas of Wells Fargo said in a report this week.

As a result, Kwas expects the April SAAR to fall sequentially from March because of inventory shortages caused by the Japanese earthquake.

“Underlying retail demand continues to strengthen and automakers will attempt to make up for lost production later in the year,” he added.

GM, Toyota, Honda and Nissan are among automakers that have idled plants and cut output because of parts shortages in Japan. The unplanned reduction in car and light truck output and supply is expected to prompt Japanese automakers to reduce fleet sales and redirect inventory to retail sales.

“We know there will be challenges in the coming months as we continue to deal with supply chain issues resulting from the earthquake in Japan,” John Mendel, head of sales for American Honda, said today in a statement.

Mr. Marchionne has repeatedly said he wanted to take Chrysler public in the second half of 2011. It would need to repay U.S. government loans the company received during its bankruptcy in 2009 and raise its liquidity. The loans carry 10 percent interest rates that cost Chrysler more than $1 billion last year, reported The Wall Street Journal.

But the company is still in discussions about securing funding to repay the loans. Chrysler has had an “incredibly good reception” from a potential pool of lenders and arrangers to refinance its loans, Mr. Marchionne said. But he added: “We are looking for solutions.”

“We need to get ready,” Mr. Marchionne said. “That takes time … We should do it properly,” he said.

Chrysler owes $5.8 billion to the U.S. Treasury and $1.6 billion to Canada’s federal and provincial governments. The U.S. government owns 9.2 percent of Chrysler.

Mr. Marchionne, who is also CEO of Fiat SpA, reiterated his expectations of having Fiat raise its stake in Chrysler to 51 percent by the end of the year. Fiat would like to exercise an option to buy an additional 16 percent stake in the U.S. car maker ahead of the IPO. Fiat now owns 25 percent of Chrysler.

Fiat is working toward increasing its stake by 5 percent installments by meeting a series of milestones set by the U.S. government to improve Chrysler.

Banks are on firmer financial footing, helped by government aid and renewed demand for auto loans that are packaged and sold as securities, a market that raises money and allows banks to write more loans. Buyers, too, are gaining confidence. U.S. auto sales rose 20 percent in February to the highest monthly pace since “cash for clunkers” in August 2009, reported The Detroit News.

This month, General Motors, Chrysler, Ford, Nissan and others have been offering zero percent interest rates on auto loans. Luxury makers such as Acura and Cadillac have lease deals with zero percent down. Banks have cut their interest rates on auto loans in half.

“If you feel comfortable purchasing today, the deals are out there to be had,” said Mark Hawks, 40, an information technology specialist from suburban Washington, D.C., who shaved thousands of dollars off the sticker price of the Ford Taurus SHO sport sedan he bought in December.

Hawks has a credit score of 780, which puts him in the highest tier of borrowers. He was pre-approved through his credit union for a five-year loan with a 3.99 percent annual interest rate. But his dealer beat that, offering a 3.79 percent rate with no payment for 90 days through Fifth Third Bank. The dealer also kicked in a $2,000 rebate and the trade-in value of Hawks’ eight-year-old Subaru. Final price of the new car: $33,000, compared with a sticker price of $46,000.

Here are some reasons for the great deals:

Lower rates. Buyers are paying an average annual percentage rate of 3 percent for new cars financed in February, down from nearly 4 percent in the same month a year ago, says auto research site Edmunds.com. That’s one of the lowest rates since before the economic downturn.

Banks, credit unions and automotive financing companies are in fierce competition to loan you money. While credit unions and finance companies once offered the lowest rates, banks now have more competitive financing.

With short-term rates near zero percent, banks that offered loans at 7 percent or 8 percent can now profit off 3 percent or 4 percent, says Greg McBride, a financial analyst with the personal finance website Bankrate.com.

More loans for subprime borrowers. Unlike much of 2010, when the auto loan market was open mainly to buyers with the best credit, people with weak credit histories now are having an easier time finding loans because of the competitive market. The percentage of new-car auto loans going to subprime buyers — generally those with credit scores below 680 — rose 18 percent in the last three months of 2010 over the same period the year before, according to Experian Automotive.

Better leasing deals. Leasing is making a comeback. That’s a boon for people seeking lower monthly payments on a car or truck. Leases made up a quarter of new-car transactions in February, Edmunds says. That was the highest single month for leasing since November 2005.

Generally, leasing means you pay less per month than you would on a car loan. The reason: You’re only paying off the amount the car will depreciate before you turn it in. When you buy, you’re paying for the whole car, plus finance charges.

Typically, about 20 percent of new cars are leased. But the bottom fell out of that market at the beginning of the downturn because there were too many used cars and not enough demand for cars coming off lease. Leasing fell to 16 percent of the market in 2009.

But as the recession progressed, used cars became scarce as people looked for cheaper wheels. That caused used car prices to rise. Now, lenders are more willing to take on a lease, knowing the car will be worth something when the lease is up.

Interest rates are likely to stay low this year, as the economy continues to recover. That will help keep loan terms attractive. Competition also remains fierce among car companies. GM said this month that it expects to dial back on lease deals and other incentives as the year goes on.

But even though deals are good, lenders have learned their lessons from the bust. Hawks, with his stellar credit, couldn’t match the deal he got on his Subaru in 2002. Back then, he paid 2.9 percent annual interest rate on a five-year loan.

The fourth-quarter loss would exceed the $84 million deficit from the previous quarter. Chrysler on Jan. 31 will probably post an operating profit for the quarter of $186 million, according to the analysts. Chief Executive Officer Sergio Marchionne has said that high interest rates on government loans have kept Chrysler from reporting a net profit, Bloomberg reported.

While Chrysler’s U.S. deliveries rose 23 percent in the fourth quarter from a year earlier, sales fell from the third quarter, according to researcher Edmunds.com. The Auburn Hills, Michigan-based automaker’s U.S. sales fell 9.8 percent in the fourth quarter of last year compared with the preceding three months, Edmunds said.

Chrysler’s “business has gone well,” Marchionne said today, and its results are “in line with guidance.”

Chrysler in November raised its operating profit estimate for the year to $700 million, implying a $135 million fourth- quarter operating income. The automaker had earned $565 million on that basis through three quarters. Max Warburton, an analyst with Sanford C. Bernstein in London, called the guidance “conservative” at the time.

Operating profit was $239 million in the third quarter.

Fiat, the parent company, reported a third consecutive quarter of net income today, powered by Iveco trucks, Case New Holland tractors and auto demand in Brazil. Net income reached 318 million euros ($436 million), compared with a 283 million- loss a year earlier, the Turin-based company said today.

The results are for Fiat Group before the company spun off its industrial businesses into Fiat Industrial SpA this month.

Trading Profit

Fourth-quarter earnings before interest, taxes and one-time items, which Fiat calls trading profit, rose 26 percent to 615 million euros, exceeding the 598 million-euroaverage estimate of 13 analysts surveyed by Bloomberg.

Marchionne, 58, separated Fiat’s trucks and tractors units to focus on making cars. Italy’s largest manufacturer led a ninth consecutive monthly decline in European car sales in December as demand waned after government incentives expired. Fiat Industrial shares fell in Milan after the CEO didn’t raise 2011 forecasts.

2011 Outlook

Fiat forecast industry car sales in 2011 in Europe will fall 3 percent, according to a slide presentation posted on its website today.

The Brazilian car market may grow by as much as 5 percent, the company said. Fiat expects to maintain its market share in Brazil and improve it in Europe in the second half, it said.

CNH Global NV, the agricultural equipment maker that is part of Fiat Industrial, today reported fourth-quarter net income of $209 million, compared with $28 million a year earlier. Net equipment sales jumped 17 percent to $3.8 billion.

Marchionne, who aims to improve productivity and capacity utilization in Italy, this month won workers’ concessions over a 1 billion-euro plan to revamp Fiat’s Mirafiori factory.

Fiom Cgil, Fiat’s biggest union which represents 10,000 of the carmaker’s 83,000 workers in Italy, opposes the deal and has called a general strike tomorrow among metalworkers against the CEO’s plan to curtail absenteeism and strike rights.

Fiat intends to produce as many as 280,000 cars and SUVs annually at Mirafiori for the Jeep and Alfa Romeo brands as part of its venture with Chrysler. Production is scheduled to begin by the fourth quarter of next year.

Chrysler Future

Chrysler needs to sell about 1.5 million vehicles annually to break even on an operating basis, down from 1.65 million, Marchionne said Jan. 12. Global sales in 2010 rose about 21 percent to 1.6 million cars and trucks, he said.

Chrysler is expected to sell “a minimum” of 500,000 vehicles in the Asia-Pacific region by 2014, Marchionne said today on a conference call with analysts. Those sales rose to 39,688 last year, a 17 percent increase from 2009, Ralph Kisiel, a Chrysler spokesman, said today in an e-mail. The majority of those deliveries, 23,428, were in China.

Today’s statements by Marchionne, who leads both automakers, follow comments earlier this month indicating Fiat is on track to lift its share to 35 percent this year from the current 25 percent, Automotive News reported.

On a call with analysts today, Marchionne said Fiat has “an abundant cash cushion” that would allow Fiat to fund this year’s investments as well as exercise an option to purchase an additional 16 percent of the U.S. automaker.

Fiat today reported it had 15.9 billion euros ($21.8 billion) in cash at the end of last year, 28 percent more than a year earlier.

Analysts estimate Fiat may pay between $900 million to $4.4 billion for the 16 percent.

Reaching benchmarks

Fiat raised its Chrysler holdings to 25 percent from 20 percent this month after the U.S. automaker won approval to build fuel-efficient engines in Dundee, Mich. That was one of three conditions tied to the deal with the federal government that allowed Fiat to rescue Chrysler from a U.S. steered bankruptcy in 2009.

The second test requires Chrysler to record a total of $1.5 billion in sales outside North America and to obtain agreements from 90 percent of its dealers in Latin America to carry Chrysler products.

The third requires the development of a compact car on a Fiat platform that will achieve 40 mpg. Marchionne has said he expects all those requirements to be met this year.

First things first

From there, Fiat has an option to boost the holding to 51 percent — but only after Chrysler repays U.S. and Canadian government bailout loans.

“It is possible that we’ll go over the 50 percent mark if Chrysler decides to go to the markets in 2011,” Marchionne, 58, said this month at the Detroit show, referring to an initial public offering.

Marchionne also said Chrysler had met with Goldman Sachs and other banks about raising new financing that would pay back in 2011 about $7.5 billion in bailout debt owed to the United States and Canada.

Fiat may pay $900 million to $1.7 billion for the 16 percent stake before a Chrysler IPO while the same stake could be worth between $1.9 billion and $4.4 billion after the listing, according to Philippe Houchois, a London-based analyst at UBS AG.

Fiat said today that fourth-quarter earnings before interest, taxes and one-time items — which Fiat calls trading profit — rose 26 percent to 615 million euros.

The U.S. bought 21,980 vehicles directly from Dearborn, Michigan-based Ford in fiscal 2010, edging out Detroit-based General Motors Co. by about 540 vehicles, according to data obtained under a Freedom of Information request from the U.S. General Services Administration, which coordinates most federal vehicle purchases. Chrysler Group LLC sold 13,063 vehicles.

Ford’s gain under Obama’s presidency came after the administration engineered bailouts totaling $85 billion of GM and Auburn Hills, Michigan-based Chrysler and their finance units last year.

“There was a paranoia that the government was going to buy GM and Chrysler models to help them out because they had a foot in the door,” said Rebecca Lindland, an analyst at IHS Automotive in Lexington, Massachusetts. “There was a definite concern for Ford.”

The GSA has accounted for almost a quarter of sales of hybrids by U.S.-based automakers during Obama’s presidency, according to the agency data, helping Ford gain the edge over GM. Ford sold at least 11,066 hybrids to the U.S. in the past two years, compared with 3,316 for GM, which discontinued sales of its highest volume hybrid, the Chevrolet Malibu, last year.

“The GSA alternative-fuel vehicle guidelines emphasize higher fuel efficiency and reduced greenhouse gases,” Mike Moran, a Ford spokesman in Washington, said.

Ford’s Surge

Ford has boosted overall sales at twice the industry’s rate so far this calendar year and is on track to gain U.S. market share for a second year in a row — the first two-year increase since 1993, Moran said. The company yesterday reported a 20 percent gain in November sales, compared with GM’s 11 percent increase and Chrysler’s 17 percent.

Ford also picked up additional government sales of Fusion sedans, Ranger pickups and Explorer sport-utility vehicles in fiscal 2010, which ended Sept. 30. Chrysler’s Dodge Caravan minivan was the most popular government purchase from that automaker.

Ford trailed both GM and Chrysler in government sales as recently as 2006, before achieving a 92 percent increase in 2009. Government sales by all three companies fell in 2010 from the previous year — Ford’s by 22 percent, GM’s by 46 percent and Chrysler’s by 9 percent. GSA’s total purchases declined by 28 percent from 2009.

Top Models

The most popular government-bought model over the past three years is the Chevrolet Impala, the ninth best-selling model among consumers. The Chevy Tahoe SUV, often portrayed in movies with opaque tinted windows in government caravans, is fourth. Ford’s F-150 was the fifth best seller and the F-Series line of trucks had the highest volume for a group, the data show.

“We work through the GSA process to deliver the right vehicles for the right job,” said Greg Martin, a GM spokesman in Washington. “We expect other automakers do the same.”

The U.S. government buys 60,000 to 70,000 automobiles annually through the GSA, said Sara Merriam, a spokeswoman for the agency.

The shift from GM to Ford isn’t part of a specific government initiative, Merriam said.

“Industry response is a component of this,” Merriam said. “They have to bid to be considered and ultimately to be selected. Maybe Ford was the most active and aggressive.”

The GM and Ford automotive purchases in 2010 were among the 406,679 vehicles the GSA purchased in the past six fiscal years, or about $8.59 billion worth of cars, trucks, fire engines and ambulances, according to the data.

GSA Vehicle Costs

Government purchases during the six-year period were highest in fiscal 2009, as GM and Chrysler emerged from government- backed bankruptcies, totaling 89,380 units for a cost of $1.95 billion, the data show.

The GSA spent an average of $22,672 per vehicle over the past three fiscal years, ranging from $6,800 buses to $937,505 fire-fighting vehicles. The average price consumers paid was $28,508, according to vehicle-pricing website http://Edmunds.com in Santa Monica, California.

Ford Executive Chairman Bill Ford said on April 20, 2009, shortly before Chrysler and GM entered government-backed bankruptcies, that the moves might pose a competitive challenge for Ford. GM is the top-selling automaker in the U.S. and Ford is second this year. In 2008 and 2009, Ford was third behind Toyota.

‘Government Motors’

“We really don’t want to compete with a state-owned enterprise,” Ford said at the time. “Frankly, that’s probably not in anybody’s best interest, including the government’s.”

Outgoing GM Chairman Ed Whitacre said in August he wanted to shake off the stigma of being “government motors” as quickly as possible. GM raised more than $23 billion, mostly for U.S. and Canadian governments and a union health fund, selling common and preferred stock in its initial public offering Nov. 17 and in a second offering from banks last week.

The IPO, 16 months after bankruptcy, cut the U.S. stake to 33 percent from 61 percent.

It would be difficult for the government to show preference for an automaker, even one it owned, because of the structure of the U.S. bureaucracy, said Jeff Green, president of at JA Green & Co. LLC in Washington, who has a background in government contract law.

“The government is so disaggregated that it would be hard to favor one company over another,” he said. “I would have been really surprised if someone were able to game the system.”

Changes from the previous model and Chrysler’s volume and pricing strategy boosted the residual value of the Grand Cherokee’s four-wheel-drive version to 45 percent in the third quarter from 35 percent a year earlier, according to researcher ALG Inc. Residual values are projected resale values that determine buyers’ monthly lease payments.

Chrysler used testing that simulated three years of use while developing the Grand Cherokee to make it more reliable, and the vehicle’s third-quarter deliveries rose 35 percent, with a higher percentage coming from leases. The automaker is working to repeat that success with 15 other new or refreshed models, most of which begin production late this year.

“Beyond any shadow of a doubt, the leasing factor on the Grand Cherokee is the reason it’s having an outstanding sales rate,” said Dan Frost, a Chrysler dealer in suburban Detroit.

The Grand Cherokee’s percentage of sales from leases climbed to 25 percent in September from 2 percent in the same month last year, according to Edmunds.com.

Chrysler last week reported its best quarter since emerging from bankruptcy and raised its 2010 forecast. The third-quarter net loss narrowed to $84 million, and net revenue rose 5.2 percent from the second quarter to $11 billion, driven by Grand Cherokee sales, Chief Financial Officer Richard Palmer said.

The percentage of sales from leases on Chrysler’s four brands this year increased to 11 percent from 2.6 percent in 2009, while still trailing the industry’s 21 percent, according to Edmunds. Chrysler’s overall residual values rose to 50 percent in September from 36 percent a year ago, according to CNW Research. The industry average in September was 76 percent.

“We obviously make money leasing vehicles,” Palmer said on a Nov. 8 conference call. “The residual values on our vehicles are improving, especially as we improve, as we introduce the new products. So we expect that to grow.”

The new or refreshed vehicles include the midsize Chrysler 200 sedan, Dodge Durango and Fiat 500.

Resale value predictions haven’t yet been computed for most of Chrysler’s new vehicles, Fernando Ubeda, ALG data analytics manager, said in an e-mail this week.

Chrysler’s residual values had been hurt, in part, by last year’s uncertainty around the company, Jim Morrison, the head of Jeep product marketing, said in an interview in San Antonio in late October. Chrysler emerged from bankruptcy in June 2009 under the control of Fiat SpA.

None of Auburn Hills, Michigan-based Chrysler’s vehicles scored above average in Consumer Reports’ annual reliability survey released last month. Twelve of the 20 Chrysler models for which enough data were available for a rating scored below average, the magazine said.

The U.S. automaker spent extra time in the past year trying to improve the Grand Cherokee’s resale value, believing it would help drive sales through better leasing, executives said in interviews last month. As part of its increased testing, the company had 72 Jeeps driven nonstop for 36,000 miles, which represents about three years of use, said Philip Jansen, chief engineer on the Grand Cherokee.

“You start to see any issues,” he said. “It really helped just kind of pull out stuff that historically we would not have found for three or four months into production.”

The automaker met with ALG in March about plans for the vehicle, including specifications and production plans, then returned in May with the new Jeeps, Morrison said.

“After getting a chance to drive it, we felt the changes put the Grand Cherokee in a better competitive position,” Ubeda said in an e-mail explaining the Santa Barbara, California-based firm’s higher rating.

Chrysler is making similar efforts to win higher residual value ratings on the new vehicles, Morrison said.

“It’s really just good communications,” Morrison said. “We’ve mirrored it for all of the rest of the brands.”

The new Grand Cherokee began production in May and full volumes started arriving in showrooms during the third quarter, Chrysler officials said.

“I’ve never seen a product have this kind of sort of support from people who are in the business of evaluating vehicles,” Sergio Marchionne, chief executive officer of both Chrysler and Fiat, said on a conference call.