UPDATE 1-Brazil auto output falls in June; sales rise

* Output falls, probably reflecting domestic slowdown

* Fiat leads sales in Brazil; VW sales fall in June (Rewrites paragraph 1 to add context, updates with details in paragraphs 3-7)

SAO PAULO, July 12 (Reuters) - Brazilian automakers association Anfavea said on Monday that production of new cars and trucks dropped 5 percent in June from the prior month, probably reflecting a slowdown in domestic sales in recent months.

Sales, however, rose in June, climbing 4.6 percent to 262,800 units from May, Anfavea said. Sales had fallen 9.6 percent in May from April.

Sales fell from a year earlier, tumbling 12.5 percent, Anfavea said.

Production rose 7.7 percent in June from a year earlier, Anfavea added. This year, automakers based in Brazil have ramped up output on a year-on-year basis to meet demand from overseas markets.

Brazil, Latin America's largest economy, is a major market for global automakers such as 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 maintained the top spot for sales of vehicles excluding trucks and buses, Anfavea said. Sales rose 9.5 percent to 60,164 units in June from May.

Volkswagen followed with sales of 52,245 vehicles, a 4.3 percent drop from May.

GM sold 49,043 units compared with 46,526 vehicles in May. Ford sold 24,440 vehicles, a 22 percent increase from 19,984 vehicles it sold in May. (Reporting by Rodolfo Barbosa; Writing by James Matthews and Guillermo Parra-Bernal; Editing by Gerald E. McCormick)