* Overall Canadian sales fall 7.9 percent in March

* Ford Canada records third month of sales gains

* GM retakes No. 1 sales position

Auto sales in Canada fell for a 10th straight month in August, industry figures showed on Tuesday, though Ford managed to maintain the sales and market-share momentum that it gained in the middle of the industry crisis.

Overall Canadian vehicle sales fell 7.9 percent from August 2008 to 135,351 units, according to data from DesRosiers Automotive Consultants Inc.

I guess one could say that is an improvement from the double-digit declines through most of the past year, said Dennis DesRosiers, president of the firm. But understand that there is little in these numbers to indicate that things are getting better.

Global recession took the legs out from under the auto industry, leading to bankruptcies at General Motors [GM.UL], and Chrysler earlier in the year.

Both companies have reemerged from U.S. Chapter 11 filings with the help of billions in U.S. and Canadian government aid, but they have found little sales traction in Canada as lingering concerns and soft economic conditions have kept customers out of the showrooms.

Many countries around the world have boosted auto sales through so-called cash for clunkers programs, but Canada has not offered such a program. [ID:nN01493744]

Ford Motor Co (F.N), the only Detroit-based auto company not to rely on government funds to survive, recorded its third consecutive month of sales growth in Canada, with a 7.1 percent increase over last August, to 22,236 units. The company also recorded its 10th straight month of market share gains.

So far this year, Ford's share of the Canadian market is up by close to 3 points, with one point representing about 14,000 vehicles, David Mondragon, Ford Canada president and chief executive, said in an interview.

We continued to gain sales and share in a declining industry and we had a tremendous car month, so it wasn't solely on the back of our great selling trucks, he said. We are a very balanced company and we are a great car company.

Car sales at Ford Canada were up 17 percent while truck sales rose 5 percent.

GM Canada, despite seeing its sales fall 27.9 percent, took back the No. 1 sales spot in Canada, after giving it up to Ford in the previous two months, with 23,135 units sold.

GM's car sales fell 45.4 percent and its truck sales were down 11.3 percent.

Toyota Canada Inc (7203.T) sales skidded 21.4 percent to 18,239 from August 2008. The Japan-based automaker's Toyota division recorded a 24.2 percent sales drop, while the luxury Lexus brand improved by 31.3 percent for its best August on record.

The Canadian arm of Chrysler, which exited bankruptcy in June, said its sales dropped 7.2 percent year-on-year to 14,432 units in August.

The company said that due mainly to the strength of the Brampton, Ontario-built Chrysler 300 and Dodge Charger, its passenger car sales rose 7.8 percent to 2,713 units. Its truck sales dropped 10.1 percent, to 11,719.

Honda Canada Inc (7267.T) sold 12,218 units in August, an 18 percent drop from last year. Sales in the Honda auto division fell by 22 percent, while sales in the Acura division rose 26 percent year-on-year.

($1=$1.10 Canadian) (Reporting by John McCrank; editing by Peter Galloway)

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