U.S. auto sales rose 10 percent in 2011 but major automakers forecast a slowdown in growth this year because of weak job growth and risks to the American economy from a slowdown in Europe.

Auto sales have been a relative bright spot in the economy since late summer with cash-strapped consumers forced to buy to replace cars that have been on the road for a decade or more.

December U.S. auto sales rose 9 percent to hit an annualized sales rate of 13.6 million vehicles, in line with Wall Street expectations. Full-year 2011 sales totaled 12.8 million vehicles compared with 11.6 million in 2010.

Auto sales are tracked as an early indicator of consumer spending, and analysts said December results were boosted by lower interest rates and a greater selection of vehicles on dealer lots.

On a full-year basis, the biggest winners were Chrysler, bouncing back from crisis under the control of Fiat SpA , and Korean powerhouse Hyundai-Kia. Both posted a 26 percent gain in annual sales.

The biggest losers were Toyota Motor Corp <7203.T> and Honda Motor Co <7267.T>, which both saw U.S. sales drop 7 percent after the March earthquake in Japan shut down production and left dealer lots short of popular cars like the Camry and Accord.

Most major automakers forecast 2012 sales of between 13.5 million and 14 million vehicles, implying annual growth of between 5 and 9 percent. Ford Motor Co offered a wider estimate it said reflected the outside chance of another economic setback.

The momentum coming out of the fourth quarter gives us confidence that the low end of that forecast is less likely, Ford economist Ellen Hughes-Cromwick said.

Even at the most optimistic projections, the U.S. auto industry would be far short of the nearly 17 million vehicle sales it averaged in a 10-year period through 2007.

Analysts said U.S. automakers have slashed enough jobs and closed plants to make money even at the bottom of the industry's bust cycle, but executives remain conservative.

We're still in a recession-like industry, GM U.S. sales chief Don Johnson told analysts on a conference call after offering the automaker's growth forecast for 2012.

In one positive sign, the industry-wide increase in sales in December came without the cash-back offers and other costly incentives that automakers have sometimes relied on to lure consumers to showrooms.

The exception was for luxury cars. Daimler AG's Mercedes-Benz and BMW each piled on incentives last month as they raced to claim bragging rights as the most popular luxury brand in the American market.

Both German automakers said final sales figures were not ready as of Wednesday evening.

Chrysler and Volkswagen AG rose 37 percent and 36 percent, recording the strongest sales gains for the month. Ford Motor Co and General Motors Co posted increases of 10 percent and almost 5 percent.

Sales are expected to get a lift in 2012 because Americans have held back on replacing old cars for so long. The average car on the road is 11 years old, and Ford estimates about 50 million vehicles -- one of every five in use -- is older.

Guggenheim Securities analyst Matthew Stover said he expected industry-wide sales growth of just 4 percent this year, despite replacement demand for older cars and trucks.

With relatively weak employment trends, sluggish real-income growth and consumer confidence that is improving but not strong by any stretch of the imagination, it doesn't feel to me like a traditional cyclical recovery, he said.

Toyota said its U.S. market share of about 14.4 percent in December was back to pre-March earthquake levels. The Japanese automaker expects its U.S. dealer inventory to be fully recovered by the end of March.

While Toyota sees U.S. industry sales up about 6 percent in 2012, it expects its own sales to rise 15 percent.

Ford's U.S. sales, which came in above expectations, were helped by its best month for retail sales -- as opposed to fleet sales -- since 2005.

The gain at Chrysler came with a refreshed lineup of cars and trucks. For the year, Chrysler's market share bounced back to almost 11 percent from just over 9 percent in 2010.

But Chrysler's owner, Fiat, fell far short of its sales target for the Fiat 500. The Italian-designed small car had sales of just over 19,000, well below the company's target of 50,000 in its return to the American market.

GM shares closed up 0.5 percent at $21.15 on Wednesday, while Ford shares gained 1.5 percent to close at $11.30.

(Additional reporting by Kevin Krolicki in Detroit; editing by John Wallace, Mark Porter and Matthew Lewis)