3rd UPDATE: US Auto Sales Rise In Dec As Executives Predict Rebound In '10

DETROIT -(Dow Jones)- The auto industry closed the year on a positive note-- led by strong December results from Ford Motor Co. (F) and Toyota Motor Co. (TM, 7203.TO)--as many executives predicted a gradual recovery in 2010.

After auto sales slumped around the world last year, the industry is hopeful that consumers will return to their showrooms as some economic barometers highlight an economic recovery is underway. The industry is moving away from the boost it received this summer from the U.S. government's "Cash for Clunkers" incentive program, but will be helped by easier comparisons over the next several months, as auto sales were especially brusing in the beginning of 2009.

Ford posted a 33% jump in December U.S. light-vehicle sales, ending a stellar year compared to rivals for the auto maker, as it recorded its first full-year market share gain since 1995. Meanwhile, Chrysler Group LLC posted a 3.7% decline and said its full-year sales were the worst the struggling auto maker had seen in 47 years.

And the largest U.S. auto maker--General Motors Co.--posted a 5.7% decline, but noted its process to sell-down Pontiac and Saturn inventory was ahead of schedule and reported a 2.2% increase for the four brands GM will keep following its streamlining.

Honda Motor Co. (HMC, 7267.TO) and Nissan Motor Co. (NSANY, 7201.TO) joined their bigger Japanese rival in reporting strong sales.

Toyota came close to catching GM in terms of U.S. sales in December. Toyota said it sold 187,860 vehicles in the U.S. during the month compared with GM, which sold 193,824 cars and trucks once the auto maker's non-core brands of Pontiac, Saturn, Hummer and Saab are subtracted. GM has agreed to sell off Hummer, and is in the process of killing Pontiac and Saturn. The fate of Saab is unclear.

The results underscore how the auto makers have responded to the economic recession that began officially in December 2007 and led to the bankruptcies of Chrysler and GM. Auto makers have reduced production, cut jobs and offered more incentives to spark sales.

Overall, U.S. sales are expected to finish the year at 10.4 million vehicles, Ford sales analyst George Pipas said. This would be the lowest level since 1982 when sales were 10.3 million, according to Autodata Corp.

GM, though, predicted December's seasonally adjusted annual sales rate was 11.4 million, resulting in total vehicle sales of around 10.6 million for 2009, the lowest since 1992.

Ford put its U.S. share at about 15% for the year--about one percentage point higher than 2008. December's sales growth marks the fifth time in six months Ford has seen increases. The company's U.S. light-vehicle sales were 183,701 in December, compared with 138,325 a year earlier. There were 28 selling days in December, two more than last year.

For the year, Ford's sales were 1.62 million, down 15% and the best among the industry's biggest sellers in the U.S.

The results caused Ford's shares to rise 7.6% to $11.06 in recent trading, reaching the highest level since August 2005.

At GM, retail sales of the core Chevrolet, Buick, GMC and Cadillac were up 13% in December, but fleet sales slumped 33% and sales in non-core brands tumbled 55%. The largest U.S. auto maker said it sold 2.1 million vehicles in 2009, down 30% from a year earlier.

"The fact that our retail market share has increased two full points from the third to fourth quarters demonstrates that we are strengthening our brands," said GM U.S. sales executive Susan Docherty.

The company did note its sell-down of the Pontiac and Saturn brands was 10 months ahead of schedule--with only about 1,700 of those vehicles remaining. The company had offered late-month dealer incentives to clear the brands.

December's dealer inventory was 385,000 vehicles--the lowest year-end level on record, according to GM.

Chrysler reported sales fell to 86,523 vehicles in December, with cars up 31% and trucks sliding 14%. Still, the company noted 11 vehicles saw year-over-year increases. For all of 2009, Chrysler's sales were down 36% to 931,402. Chrysler, which left bankruptcy protection in June under the management control of Fiat SpA (FIATY, F.MI), has performed the worst of any of the major auto makers.

Toyota's 32% jump was led by a 44% surge for cars. Executive Don Esmond said the auto industry has gained positive momentum for a gradual recovery after a rollercoaster year, in which Toyota's U.S. sales fell 20% to 1.8 million.

Honda had a 24% jump in December, leaving 2009's decline at 20%. Earlier Tuesday, the Japanese auto maker said the decline in global auto sales has ebbed, but that an immediate recovery in the major markets of the U.S., Japan and Europe is unlikely.

Also, Nissan's U.S. sales rose 18%, though full-year results were down 19%. " Despite the huge challenges and uncertainties of last year, combined Nissan and Infiniti market share set a record in 2009," said Nissan U.S. sales and marketing executive Brian Carolin.

Meanwhile, Hyundai Motor Co. (HYMLY, 005380.SE) reported December U.S. sales jumped 41%, while full-year sales rose 8.3%. The South Korean auto maker said it posted market-share increases each month of 2009, resulting in what Hyundai believes was the biggest market-share gain in the industry.

American depositary shares of the three Japanese auto makers were each down around 2% while Hyundai's were flat.