Ford ( F) reported its smallest sales decline in 11 months, making it the country's No. 2 automaker in June and raising the possibility that it could move to the top spot.

Ford said its June sales fell by 11%, while Toyota ( TM) sales fell 33% and sales at General Motors ( GMGMQ) fell 34%.

Ford, Lincoln and Mercury sales totaled 148,153, while Toyota sales were 131,544. GM sales for Buick, Cadillac, Chevrolet, GMC and Pontiac totaled 167,194. GM plans to close Pontiac, but expects to retain much of the sales volume.

On a sales call with analysts and reporters, Mark LaNeve, GM's vice president for North American sales, speculated that Ford could surpass GM as the country's top automaker. "We'll have four brands, they'll have three (and) the number of dealers will be almost identical," he said.

But LaNeve, like Ford sales executives, stressed that the goal is to be profitable based on selling the best vehicles, not to outrank another manufacturer in sales totals.

That is the old, failed model, and the auto industry is changing quickly. Perhaps the best indication is the precipitous decline in inventories. Old Detroit made too many vehicles and then sold them at too-steep discounts, a reflection of the concept that they could lose money on each vehicle but make it up on volume.

At the end of June, Chrysler had an inventory of 195,272 vehicles, down 56% from the same month a year earlier. Ford's inventory was 343,000 vehicles, down 38%. GM's inventory was 582,000 vehicles, down 26%.

Auto sales picked up in June, particularly at Ford, which showed a single digit decline in retail sales and said that in some key areas of the country, it saw no decline at all.

Ford said its retail sales fell just 8%, while its overall sales including fleet fell 11%. In about a third of 22 U.S. sales regions, "We had higher retail sales than a year ago," said sales analyst George Pipas, on the Ford sales call.

The strongest sales were in a central U.S. region including Dallas, Houston, Memphis and Kansas City, Pipas said. But sales in the west, particularly Los Angeles and Phoenix, were down 20% to 30%.GM also said its weakest sales division was the West Coast, particularly California.

GM reported a 29% year-over-year retail sales decline, while Chrysler reported a 16% decline. Overall, GM's sales decline was 34%, while Chrysler's was 42%, but both companies reported sharp reductions in fleet sales, a result of sharply reduced June production. Chrysler fleet sales fell 95%, while GM fleet sales fell 49%.

LaNeve also noted that sales softened in the last week of June, as people awaited a decision by Congress on the Cash for Clunkers program, now slated to take effect July 24.

"It certainly put some people on the sidelines in the last week of the month," he said. The industry's annual sales rate would have reached a pace of 10.2 million to 10.5 million were it not for the slowdown, which reduced the rate to about 10 million, he said.