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UPDATE 1-Canada auto sales growth seen modest, Ford leads

* Ford leads Canadian market for first time in 50 years

* Industry sales rise 0.5 pct in December, 6.6 pct on year

* Toyota, GM full-year sales fall (Updates throughout, add analyst comments)

TORONTO, Jan 4 (Reuters) - Ford Canada F.N capped a market-leading year with an 8.6 percent sales gain in December, spearheading strong annual growth in the Canadian auto market that industry players doubt will be repeated in 2011.

Sales for the industry rose a slim 0.5 percent in December, but charged ahead 6.6 percent for the year, as aggressive incentives and sales helped the industry rebound from a weak 2009, according to data compiled by analyst Dennis DesRosiers.

“(Annual industry sales) surprised high in many respects,” DesRosiers said.

“We always expect incentives of some sort, but this past year... it was not uncommon to have C$10,000 to C$15,000 (discounts) on the hood of a vehicle.

For Ford, which escaped the auto downturn without requiring a government bailout, results were driven by a a nearly 17 percent rise in car sales in December, as the automaker’s long-time reliance on its F-Series truck line eased.

In doing so, Ford knocked a restructured General Motors GM.N from the top spot in Canadian full-year sales.

Ford, which reported December sales on Tuesday, is now aiming to gain traction in the red-hot market for fuel-efficient compact cars. The company will roll out a new five-door Focus this year to try to grab a bigger stake in the market segment.

“Trucks have been over-indexed with high incentives, but fuel prices are escalating,” Ford Canada Chief Executive David Mondragon told Reuters. “We think there’s a chance for a cooling-off period in full-sized trucks.”

Ford’s rise to prominence follows the auto industry’s 2008-09 tailspin, which forced GM and Chrysler to restructure.

Chrysler reported a sharp rise of 26 percent in full-year sales, while GM’s Canadian sales, including discontinued brands, eased 2.8 percent in 2010.

Toyota Canada 7203.T, which was the country's No. 2 automaker in 2008, has fallen back after a series of high-profile recalls and saw its sales slide 16.2 percent in 2010.

SLIGHT GROWTH SEEN IN 2011

Ford Canada sold 19,477 vehicles in December. Car sales rose 16.8 percent to 4,118 units, while truck sales gained 6.6 percent to 15,359.

For the full year, Ford Canada sold 267,974 vehicles, up 19 percent from 2009.

Mondragon would not set a goal for Ford sales this year. He expects industry-wide sales to expand, but growth should be tempered by weak consumer confidence and the prospect of rising interest rates.

“We see moderate growth over the next few years of about 2 percent per year,” he said.

DesRosiers also calls for slight growth, predicting expansion of 1 or 2 percent, although he said that could be higher if automakers continue to offer lucrative incentives.

GM Canada said sales rose 6.3 percent in December to 20,175 units, led by an 14.7 percent jump in truck sales. For the year, sales totaled 247,104 vehicles.

Including only its four core brands -- Chevrolet, Buick, GMC and Cadillac -- the company’s December sales rose 16.9 percent and full-year sales climbed 23.4 percent.

Sales of Toyota vehicles, including its luxury Lexus brand, plunged 46.3 percent in December to 9,507. For the full year, Toyota and Lexus sold 171,972 units.

Chrysler Canada sales rose 4 percent to 14,407 in the December, giving it full-year sales of 204,955.

Honda Canada 7267.T sales -- including its luxury Acura brand -- rose 4 percent to 12,876 in December. Honda sales rose 3 percent, while Acura sales jumped 16 percent.

For the year, sales rose 1 percent to 141,070 vehicles, driven by a 1 percent rise in Honda branded vehicles and a 2 percent gain in Acura sales. (Reporting by Cameron French; editing by Rob Wilson)

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