UPDATE 1-Brazil vehicle sales rise in June vs May

* Fiat retains No. 1 spot in Brazil car sales in June

* Fenabrave cuts forecast for auto sales to 5.12 mln

* Sales fell 12.4 pct from year earlier, group says (Revises first paragraph, adds ranking in paragraphs 3-6)

SAO PAULO, July 1 (Reuters) - Automobile sales in Brazil rose 4.7 percent in June from May, reflecting strong consumer demand for durable goods as lending remains plentiful, an industry group said on Thursday.

Sales of new cars, light vehicles, trucks and buses totaled 262,780 units last month, the nation's automobile dealers' association Fenabrave said in a statement. The number does not include motorcycles, the group said.

Still, sales fell by 12.4 percent on a year-on-year basis, underscoring a flop in demand for new vehicles following the end of government-sponsored tax breaks.

The Sao Paulo-based association also reduced its estimate for car sales, including motorcycles, this year to 5.12 million units from 5.15 million units previously. Yet that represents an increase of 7.8 percent from the record 4.75 million units sold in 2009.

Brazil, Latin America's largest economy, is a major market for Italy's Fiat SpA (FIA.MI), Germany's Volkswagen AG (VOWG.DE), and U.S.-based General Motors Co [GM.UL] and Ford Motor Co (F.N).

Fiat sold 60,167 units in June, more than any other carmaker in Brazil. Volkswagen sold 51,965 units in the month, while GM sold 49,049 vehicles sold last month. Ford sold 24,441 units in the same period.

In the year through June, sales of vehicles excluding motorcycles surged 9 percent to 1.58 million units, Fenabrave said. (Reporting by Alberto Alerigi Jr.; Writing by Guillermo Parra-Bernal; Editing by Gerald E. McCormick and Matthew Lewis)