Ron Zarrella, the vice president for sales, marketing and service, said US sales in July could fall by 40 per cent, putting GM behind Ford Motor Co. in monthly volume for the first time in about 75 years.

Because GM's production losses are depriving rental car firms such as Enterprise Rent-A-Car during their Prime buying season, GM's fleet business will fall below plan for this year, said Zarrella.

He added Enterprise, the company's largest rental car customer, has agreed to stay with the automaker for the time being. GM now has an average of 70 days supply of cars and trucks on hand, enough to satisfy retail customers for the current month, Zarrella said. But fleet sales will plummet 20 per cent in July. Sales of pre-placed orders will fall 10 per cent and employee sales will also dryup.

If production does not resume by mid-July at two struck Flint, Michigan, parts plants, GM's retail sales will suffer in August, dragging the company's total sales down even further, he said. At the end of this month, Zarrella forecast GM will be losing about 21,000 customers a day.

That could do long-term damage to GM's recent market share momentum because customers have a wide array of high quality products to chose from.

"The irony is if we start to lose retail customers, the business will just get smaller and they'll be fewer jobs," he said. About 9,200 United Auto Worker Union members are on strike at a stamping plant and Delphi East parts operation in Flint.

The union said the strikes are over health and safety violations, but UAW leaders are also fighting GM's ongoing attempts to cut jobs to make its operations more efficient.

The walkouts have forced GM to halt output at 26 of its 29 North American assembly operations, as well as more than 100 parts plants.

Zarrella said GM's marketshare will end July under 25 per cent, compared to an estimated 31-33 per cent for June.

"I expect the whole market to take a breather in July, but that rate of decline may well make us number two in the market," Zarrella told reporters at a briefing at GM's corporate headquarters.

GM's US June sales of cars and trucks were 492,937, an increase of 23.7 per cent against a weak performance in June a year ago. GM had orders to ship about 95,000 vehicles to fleet dealers, but the strikes prevented it from filling 15,000 of those orders. Senior executives have announced sweeping cost-cutting measures to conserve cash during the strike. As part of that, GM has launched a review of car and truck spending. Zarrella would not specify which vehicles may be dropped, but industry analysts have said slow-selling cars such as the Camaro and Firebird coupes may not be renewed.

GM has about 80 car and truck lines, down from 109 four years ago. Zarrella said that is about where the company wants to be, although there isstill some overlap in car lines.

"We have more cars than we need and not enough trucks. One of the outcomes of this may be getting out of those cars faster," he said.