Ford tops Toyota in US sales......

Auto sales in the U.S. remain severely depressed, but results released by automakers today pointed to what could be the first signs of a recovery after a long and bleak run.

The industry as a whole declined 28% in June as compared to a year ago, according to Autodata Corp., with 859,847 cars and light trucks sold, its smallest dip since September.

Ford Motor Co., the nation's second-largest automaker, led the way, with a modest 11% decline in sales in June, compared to a year earlier, its smallest slide in over a year. It attributed the increase to a strong product mix and is responding by boosting production in the third quarter.

And while General Motors Corp. and Toyota Motor Corp. saw more substantial dips, of 34% and 32%, respectively, both showed improvement over recent months' dismal results, among the worst in their histories.

Among other large automakers, Chrysler Group, which along with GM filed for bankruptcy this spring, said its sales fell 42% on the month, and Honda Motor Co. saw a decline of 29% compared to June 2008. Nissan Motor Co. sales were down 23%.

"The tide seems to have shifted in recent weeks," said Jim Farley, Ford's head of marketing and communications. "We remain grounded, however, given challenging industry and economic conditions."

Executives at the automakers attributed the slight improvements to an improving - or at least stabilizing - economic outlook. Toyota and Nissan also said that availability of credit to consumers, which had been deeply restrained, was looking up.

Ford, the nation's second-largest automaker, sold 148,153 cars and light trucks in June, compared with 167,090 a year earlier. Ford is alone among U.S. carmakers to not take federal bailout loans, and that has paid off handsomely among consumers, according to the automaker.

GM, which filed for bankruptcy protection on June 1, still sells about one in five cars and trucks in the country, and led all automakers with 176,571 sales in June, down from 265,937. As part of its restructuring plan, it will shed four of its eight U.S. brands, but company executives say it expects to lose no more than two points of market share from the cuts.

Executive optimism aside, the market continues to hover far below even what would have been called depressed levels a year ago. On an annualized basis, industry sales in June hit a level of 9.7 million units, according to Autodata, which is down 40% from the industry's sales rate for most of this decade.

Moreover, sales for domestic and import brands remained very weak in several key regions. Chief among them has been California, the nation's largest auto marketplace, due to the area's continuing housing problems and high unemployment rate. Ford, GM and Toyota all cited difficulties in the state, particularly in the Los Angeles area, although a few new models, such as a redesigned Toyota Prius and the new Chevrolet Camaro have been selling strongly here.

"There are still some strong head winds out there," said Michael DiGiovanni, GM's top sales analyst. Automakers said they expected the third and fourth quarters to be a bit better and that full-year results would come in closer to 10.5 million cars and light trucks sold.

A year ago, the industry was on pace to sell 13.6 million vehicles, but the soaring price of gasoline, which peaked in July 2008, brought a hammer down on vehicle sales, prompting industry executives to predict impending disaster.

Those predictions were on target, and the last 12 months have been the most brutal, in terms of sales, that the industry has faced in at least three decades. For all of 2008, sales declined 18%, and through the first five months of this year, they were down 37%.

But in the last month, with positive -- or at least less negative -- signs coming from the economy, there has been hope in the industry that things might be turning around.

GM this week announced an aggressive Fourth of July incentive program, while Hyundai rolled out a new plan promising $1.49 gas for a year to purchasers of its vehicles. Suzuki, a small player in the U.S., said today it would offer purchasers of some of its models three months of free gas.

Another key boost could come from the government's so-called "cash for clunkers" program, which will allow drivers to get up to a $4,500 credit for trading in fuel-hungry older cars for new vehicles once it takes effect later this month.

"We know some customers were telling us that they're sitting on the fence in anticipation of the program," said Bob Carter, Toyota's U.S. general manager. He said Toyota also plans to boost production in the next quarter.

Another key to a rebound will be the fate of GM and Chrysler. As doubts swirled about the troubled automakers throughout the winter and spring, their sales entered a veritable free-fall and are off 41% and 46%, respectively, through June compared to last year.

Now, at least, with the filing of bankruptcy by Chrysler in April and GM on June 1, there is more certainty in an industry that seemed overshadowed by its financial woes.

With GM and Chrysler's worst problems likely behind them, and the federal government backing warranties on their vehicles, consumers appear to be -- cautiously -- returning to dealership lots.

Chrysler emerged from bankruptcy after six weeks. GM is currently awaiting a judge's decision about whether it can follow Chrysler's lead and emerge from Chapter 11 as a new entity with far less debt.

"It was a good month in the face of difficult conditions," said Mark LaNeve, GM's head of sales, marketing and service. "But our position is tenuous. Consumers are expecting a very quick exit from bankruptcy."