SAN FRANCISCO (MarketWatch) — General Motors Co. and Ford Motor Co. posted strong gains in January U.S. sales, even as the two top U.S. auto makers worked to curb fleet sales and ramp up their retail business.

Rounding out the parade of results, Chrysler Group LLC and the Japanese competition all posted double-digit percentage gains.

“We were looking for strong numbers, and what we’re seeing is even better than we thought,” said Truecar.com analyst Jesse Toprak. “There’s some real recovery in consumer demand.”

The seasonally adjusted annual rate of sales (SAAR) rose to 12.6 million vehicles from 10.75 million a year ago, according to Autodata. That marks the highest SAAR level since the artificial sales spike from the cash-for-clunkers promotion in the summer of 2009.

GM GM, +2.78% said it sold 178,896 cars and trucks in the U.S. last month, up from 146,825 vehicles in the year-ago period, a rise of 21.8%. That tally topped analyst targets and set an optimistic tone early as others in the industry prepared to post their results.

Ford F, +1.28% followed with a 13.3% rise to 127,317. Its car sales moved fractionally lower, resulting from the move away from rental-car customers, while trucks picked up the slack with a 24.6% increase.

The top-selling F-Series pickup reported a 29.6% improvement to 35,806 vehicles.

“We’re off to a great start in 2011 with the largest January retail sales increase in more than a decade,” said Ken Czubay, Ford’s vice president of U.S. sales. Ford’s retail sales jumped 27%.

Separately, Chrysler came in with a 23% rise in sales to 70,118 cars and trucks. The auto maker, in which Italy’s Fiat (F) holds a 25% stake, cited its 16 all-new or refreshed models for the year-over-year improvement.

The Jeep brand notched the biggest gains, up 47% from a year earlier, while the Chrysler brand dipped 7%.

GM leans on promotions

Excluding its four discontinued brands, sales of GM’s four core nameplates — Chevrolet, GMC, Cadillac and Buick — rose 23%.

“January signaled a good start to the year for us, for the industry, and we think it’s a good sign for the overall U.S. economy,” said Don Johnson, GM’s head of U.S. sales.

Fleet sales, which are much less profitable than retail sales, dropped 7% due to less business with rental-car companies. Retail sales, however, jumped 36%.

Stocks see best January since 1997

The Cadillac brand showed the biggest percentage increase, up 49% to 12,580 vehicles. Chevy is by far GM’s best seller, and its sales rose 19% to 125,389 vehicles.

Edmunds.com analyst Michelle Krebs attributed GM’s gains to ramped-up sales promotions, particularly at Buick and Cadillac.

“GM’s strong performance was buoyed largely by much heftier incentives than its competitors, particularly in certain regions of the country, including the domestic-friendly heartland,” she said.

The car-buying research website found that GM spent an average of $3,762 per car against an industry average of $2,530. Cadillac, the most generous, spent $5,641 on average.

Shares of GM and Ford both closed less than 1% lower.

Toyota, Nissan keep pace

Toyota Motor Corp. TM, -1.10% reported a 17.3% rise in January U.S. sales to reach a total of 115,856 cars and trucks as it continues to rebuild its reputation after a costly spate of recalls.

“We are encouraged by last month’s results, which show continued strength in both the passenger and light-truck segments,” said Bob Carter, group vice president of Toyota Motor Sales U.S.A.

Truecar.com’s Toprak had expected a better result but acknowledged that the company is turning the corner.

“Toyota is finally starting to emerge from the black clouds of the recall, and it is poised for real growth,” he said. “Still, it will be a long haul.”

Nissan Motors NSANY, -2.01% reported a 14.8% rise to 71,847 vehicles in January. Nissan division sales increased 15.4% to 64,442, and Infiniti sales rose 10.3% to 7,405 units.