CHICAGO: Automakers welcomed a 28 per cent drop in US auto sales in June as a sign that the badly hit industry was stabilising and expressed hope Wednesday that a government-funded "cash for clunkers" programme would drive vehicle sales in July.

This is the first time sales have fallen by less than 30 per cent since the market crashed in September of 2008, according to Autodata.

However, June's seasonally adjusted annualised rate of 9.69 million vehicles was nonetheless weaker than the May rate of 9.91 million vehicles and sharply below the 13.69 million rate posted in June of 2008.

Total sales for the first half of the year were down 35.1 per cent at 4.8 million vehicles, according to Autodata.

Ford was the clear winner, with market share rising to 17.2 per cent from 14.0 per cent in June 2008 in Ford's sixth straight month of share gains.

"We're making steady progress and are firmly focused on our plan to build a sustainable and exciting Ford," Jim Farley, Ford vice president for marketing and communications said in a statement.

"We remain grounded, however, given challenging industry and economic conditions."

Ford's sales were down just 11 per cent in June at 155,195 vehicles while sales for the first half of the year were down 33 per cent at 775,498 vehicles.

Ford has benefited from the uncertainty surrounding rivals General Motors and Chrysler, which requested billions of dollars in emergency government loans last fall and were eventually forced to seek bankruptcy protection.

Chrysler, which emerged from bankruptcy protection on June 10 by selling its assets to a new company run by Italy's Fiat, saw its sales fall 42 per cent in June to 68,297 units.

Sales for the first six months of the year were down 46 per cent at 471,197 vehicles and its share was down to 9.8 per cent from 11.7 per cent in the first half of 2008.

While Chrysler's overall share was down two points to 7.9 per cent in June, it blamed much of the loss of a 95 per cent reduction in low margin fleet sales resulting from a decision to shutter plants during bankruptcy.

The automaker said it managed to increase its share of the US retail market by about a point to 9.0 per cent.

"We are proud our new company starts out its first month with increasing market share and continued strong retail sales," said Peter Fong, who heads Chrysler's sales organisation.

"It's a testament to our strong dealer network and loyal customers who supported Chrysler during the formation of the new company."

GM, which sought bankruptcy protection on June 1 and is hoping to emerge as a new, leaner company in the coming weeks, posted a 34 per cent drop in June sales to 176,571 vehicles.

Its total market share fell to 20.2 per cent from 20.5 per cent in May and 21.9 per cent in June 2008, according to Autodata.

But GM said it had managed to increase its retail sales for the fourth consecutive month, with retail sales up 10 per cent in June.

Sales for the first half of the year were down 41 per cent to 954,356 vehicles.

"Customers are cautiously coming back into the market, although the industry remains very weak," said Mark LaNeve, vice president for GM North America vehicle sales, service and marketing.

"The reinvention of GM remains on track and we have compelling new offers in July."

Japan's Toyota saw its market share fall to 15.3 per cent in June from 16.2 per cent a year earlier as sales dropped 35 per cent to 131,654 vehicles.

Sales for the first six months of the year fell 38 per cent to 770,449 vehicles while Toyota's share slipped 0.7 points to 16.0 per cent.

"We anticipated a tough first half of this year but we're pleased that month after month the auto industry saw some improvements," said Bob Carter, general manager of the Toyota Division.

"We believe the industry is moving beyond the bottom... (and) we see a mild recovery on the horizon."

Honda saw its share slip by 0.3 points to 11.7 per cent as sales fell 30 per cent to 100,420 in June while Nissan managed to gain 0.4 points at a 6.8 per cent share as sales fell 23 per cent to 58,298.

Korea's Hyundai continued to post gains, with June share up 0.2 points at 4.4 per cent and its share for the first half of the year up 1.2 points at 4.3 per cent.

- AFP/yb