June auto sales flat but Hyundai gains

Auto sales slipped in June from the previous month's pace and major automakers said there was no sign of the definitive second-half recovery that the battered industry had expected at the start of the year.

Hyundai Motor Co <005380.KS> bucked the trend again in the sputtering U.S. markets and shot past its rivals with a 35 percent sales gain.

The Korean automaker posted a 25 percent gain in sales the first half of 2010 but warned that industry-wide demand was running below forecasts in the world's No. 2 vehicle market.

The lower-than-expected U.S. sales come as weaker June sales from France and the prospect of higher taxes in markets like Spain deepened concern about a double-dip recession.

Monthly U.S. sales results for the Detroit automakers were up by double-digit percentages from June 2009, a month when Chrysler emerged from bankruptcy and GM filed for protection from its creditors.

Chrysler's reported a 35 percent sales increase but declined to detail the share of those sales that went to car rental agencies and other fleet customers.

Initial estimates for industry-wide sales were between 11.2 million and 11.4 million vehicles on an annualized basis.

That marks a retreat from 11.6 million in May, countering industry expectations that consumer demand would be moving toward a stronger recovery in the second half.

Ford Motor Co posted a 13 percent sales gain and said its retail sales -- excluding lower-margin sales to fleet operators like car rental agencies -- were up 15 percent.

Shares of Ford were up 46 cents or 4.6 percent at $10.54 on the New York Stock Exchange on Thursday afternoon, even as the Dow Jones industrials average <.DJI> was down 0.5 percent.

GM's overall sales rose 11 percent from a year earlier.

Analysts and some auto dealers have said the practice of reporting overall U.S. sales numbers has obscured an unusually weak recovery in consumer demand in 2010.

GM estimated that the retail component of the June sales rate was below 9 million vehicles. Ford said it could be as low as 8.5 million.

GM: NO UPTURN BUT NO DOUBLE-DIP

GM said while there was no sign that consumer demand would recover over the summer there was also no evidence of a double-dip that would push the economy back to recession.

Recent economic news continues to point to a reinforced slow recovery with some volatility, said GM's global product planning chief, Steve Carlisle, on a conference call.

The key uncertainty here is whether there will be a transition from the stimulus-supported growth we saw early to more of a consumption- and investment-driven growth, he said.

GM, which is preparing for a stock offering expected later this year, raised its spending on marketing pickup trucks and incentives on those vehicles in June.

Sales of the Chevy Silverado were up 25 percent, while sales of the GMC Sierra jumped 27 percent.

Ford's F-Series pickup truck line also saw a strong sales increase. The trucks, which are Ford's best-selling and most profitable vehicles, gained 30 percent from a year earlier.

Chrysler's Ram truck line trailed its rivals with a 7 percent gain.

Hyundai's North America chief, John Krafcik, said the Korean automaker now expects that U.S. sales for 2010 will end up around 11.3 million vehicles. That would be about 500,000 short of the consensus estimate headed into the year.

(Writing by Kevin Krolicki, editing by Matthew Lewis)