The auto industry sputtered to its second consecutive month of weaker-than-expected U.S. sales in June, marked by disappointing results from General Motors Co, Ford Motor Co and the big Japanese automakers, as the weak economy and tight supply of cars left buyers wary.

Consumers were faced with higher prices for many vehicles as U.S. automakers trimmed the deals on their vehicles, a strategy analysts and investors said has backfired in May and June. Automakers raised prices of their cars and trucks after the March 11 Japan earthquake that constrained inventories.

The consumer's still struggling out there, said Gary Bradshaw, a portfolio manager with Hodges Capital Management, which owns Ford shares. Car buyers have paused a little.

These car prices have really gone up an awful lot, he added. They probably need to tone that back a little bit if they can. I know their commodity costs are rising, but there's a fine line in there.

GM and Ford trimmed the incentives they offered buyers in June to buy new cars by 2 percent and 2.4 percent, respectively, from May, according to TruCar.com.

GM also tempered its full-year forecast for the industry as some consumers were still holding back on buying cars.

Toyota Motor Corp, Honda Motor Co and Nissan Motor Co missed forecasts despite more generous rebates as consumers responded to fewer cars on the Japanese automakers' lots by staying home, analysts said.

Monthly car sales figures are among the first snapshots of consumer demand.

U.S. auto sales in June rose 7 percent to 1.05 million vehicles, or an annualized rate of 11.45 million, according to Autodata. That falls short of the 12 million expected by a Reuters poll of economists and is the lowest rate in a year.

The sales fell almost 1 percent from May, when the annual rate of 11.8 million vehicle also missed expectations.

Nevertheless, investors received good news more broadly as the pace of growth in the U.S. manufacturing sector picked up for the first time in four months in June, a sign of optimism for the sputtering economy.

GM's U.S. sales chief, Don Johnson, cited the impact of the Japan crisis as the main driver of June's disappointing auto sales results.

Some consumers have decided to sit on their hands and delay their purchasing, he told reporters on a conference call. We view this as temporary.

It is much less to do with the economy than it is simply with the levels of inventory that some of our competitors, particularly our Japanese competitors, have, Johnson added.

STATE OF DENIAL

The U.S. auto industry was likely to finish the full year at the lower end of the company's forecast for 2011 sales of 13 million to 13.5 million cars and trucks, Johnson said.

GM, Ford and Toyota expect stronger sales in the second half of the year.

However, Jefferies analyst Peter Nesvold said the industry was on a slippery slope in thinking the Japan crisis was the only reason for its problems.

That is when you're starting to be in denial about where the end market is going, he said. I feel like the end market is weaker than what they're acknowledging.

May and June were the months analysts said the industry, especially Japanese automakers, suffered most due to the earthquake and tsunami, which caused parts shortages and tighter availability of cars.

Ford and Toyota also said demand in California, the country's largest auto market, was hurt because many residents chose to wait until July when the state sales tax declined by 1 percentage point. That means savings of $250 on a $25,000 car. However, several analysts said that was not a major factor.

GM reported sales last month of 215,358 cars and trucks, up 10.5 percent from last year, while Ford's sales rose 13.6 percent to 194,114 vehicles. Both fell short of expectations.

Chrysler sales rose 30 percent, beating expectations. Hyundai's were up 16 percent.

Nissan reported an 11.4 percent jump in sales, a result that disappointed Al Castignetti, head of the Nissan brand in North America.

Toyota and Honda, both suffering from extremely tight car inventories due to the Japan crisis, each saw sales fall a larger than expected 21 percent. Edmunds.com said it was their worst June results since 1997.

All three of the big Japanese automakers hiked their incentive offers in June over May, TrueCar said.

One bright spot was the increasing demand for pickup trucks, which all the automakers cited over the past two days.

Consumers are returning to their beloved trucks as gasoline prices decline, analysts and investors said. According to the motor club AAA, the average U.S. gas price is now $3.55 a gallon, down about 40 cents in the past two months.

U.S. automakers this month dominated the list of top-selling vehicles due to the short supply of many cars from the Japanese automakers.

GM's Chevrolet and Ford held the top six spots on the list, with the Chevy Cruze small car and Malibu mid-size sedan topping Toyota and Honda's cars at the No. 3 and No. 4 spots. The Ford and Chevy full-size pickups led the way.

In Japan, new vehicle sales in June slumped by more than a fifth, while in South Korea Hyundai and Kia Motors extended their strong run with double-digit growth. French car sales fell for the third straight month, while Brazil car sales rose 15.9 percent.

GM shares closed 0.7 percent higher at $30.58 on Friday, while Ford shares rose 1.7 percent to $14.02. The broad S&P 500 Index was up 1.4 percent.

(Reporting by Deepa Seetharaman and Ben Klayman in Detroit, editing by Matthew Lewis)