Annualized U.S. auto sales remained stubbornly below 10 million in June as an improved retail environment collided with uncertainty over a government-run scrappage program.

The final tally of seasonally adjusted sales, or SAAR, was 9.69 million, according to Autodata, down from 9.91 million in May and below analysts' expectations.

Auto executives said confusion among buyers about incentives from the "cash for clunkers" proposals had kept some on the sidelines and led to softening sales in the final week of June.

One GM executive said that the June SAAR could have run as high as 10.5 million without the uncertainty. Both GM and Ford remain confident full-year industry sales will hit 10.5 million.

This contrasts with more robust signs of improvement seen in other large global markets such as France, where sales were up 7.1% year-on-year, helped by its government-backed scrappage program.

In the U.S., Ford Motor Co. (F) beat expectations with an 11% year-on-year decline, according to data released Wednesday, while General Motors Corp. (GMGMQ), Toyota Motor Corp. (TM) and Chrysler LLC all lagged.

"We still believe there is some real strong headwinds out there," said GM's sales analyst, Michael DiGiovanni. "Higher oil prices strain consumers' budgets and consumers are still under tremendous financial distress. So, we've still got some real big issues ahead of us related to consumer sentiment."

American Suzuki Motor Corp. seized on the rising gasoline prices by offering car buyers three months of free gasoline on retail purchases of new 2009 Suzuki SX4 Sedan and 2009 SX4 Crossover models.

Ford executives also noted marked regional differences in June sales trends, marked by weakness on both coasts and relative strength in the central states stretching from Colorado to Pennsylvania.

The central states "are parts of the country where our past ownership as a result is highest so as we bring out new product, this is where we are seeing the lift," said Ford's vice president of marketing, Jim Farley.

The sharp declines at GM and Chrysler, down 34% and 42% respectively, were caused in part by tumbling fleet sales, as the companies tightened their inventories and dealers reduced their stock of vehicles. Fleet sales fell 49% and 95%, respectively.

Chrysler said its retail market share rose by 1 percentage point from a year earlier to 9% while GM said its retail sales rose month-to-month for the fourth-straight month.

Ford's share rose 3 percentage points from a year earlier, while Toyota's ongoing woes meant it was outsold by Ford in the U.S. for the third-straight month and put the company behind Ford on a year-to-date basis.

GM's sales chief, Mark LeNeve, said he expected a 250,000 boost in industry sales from the scrappage program between the end of July and Nov. 1.

In June, Ford outperformed the sector with U.S. light-vehicle sales of 154,873, with Ford, Lincoln and Mercury car sales down 11% and sport-utility vehicles falling 20%, much less than prior months. Trucks and vans declined just 6.9%, helping Ford top GM in that segment.

June had 25 selling days, one more than a year ago.

GM's light-vehicle total was 174,785, which is down 33%. At the end of June, GM's inventories were down 26% to about 582,000 vehicles, and down about 33% compared with January.

Toyota slid 32% to 131,654 as car sales slumped 36%. The Corolla saw a 53% plunge, while Camry sales dropped by a more modest 37%.

Honda Motor Co. Ltd. (HMC) reported a 30% drop to 100,420, with cars slumping 41% and trucks off just 4.9%.

Chrysler's 42% decline to 68,297 was led by a 48% drop for cars. Chrysler, which didn't produce any vehicles for fleet sales in June, reported it finished the month with 195,272 units in inventory, down 56% from a year ago and representing a 71-day supply.

Nissan Motor Co. Ltd. (NSANY) posted a more-modest 23% decline in sales to 58,298.

-By Jeff Bennett, John Kell and Doug Cameron, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

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