DETROIT- Ford Motor Co's (F.N) chief executive on Monday called the company's outlook for U.S. auto industry sales conservative, and said the automaker believes an upswing in December bodes well for its forecasts.

Ford expects U.S. auto industry sales to grow to about 11.5 million vehicles to 12.5 million vehicles in 2010, including medium- and heavy-duty trucks. That would snap a four-year decline that saw sales plunge to about 10.5 million vehicles in 2009, the worst year since the early 1980s.

We think that is relatively conservative looking at the data for this year, CEO Alan Mulally told reporters on the sidelines of the North American International Auto Show after the automaker introduced the next version of its Ford Focus compact car.

Mulally said the U.S. auto industry ended 2009 with an annualized rate of about 11.6 million units in December, which bodes well for Ford's sales outlook for 2010.

Ford, the only large U.S. automaker not to reorganize in 2009 under a government-supported bankruptcy, expects to be solidly profitable in 2011. It plans to update its outlook when it releases fourth-quarter results within weeks.

I think we saw in December that the market came back a little bit in the U.S., and I think we've felt that that was sort of a nice upswing into this year, Ford Executive Chairman Bill Ford Jr. told reporters. We're not predicting a dramatic increase.

When asked whether the automaker would be profitable in 2010, Ford said, We feel that we're on the right path, but I'll leave predictions to others.

Ford also said the automaker's next-generation hybrid vehicle, and a plug-in hybrid, would be assembled in Michigan starting in 2012. Ford is building the Focus and a battery electric Focus in Michigan.

The automaker, known for years for its F-150 pickup trucks and Explorer SUVs, is in a multi-year turnaround effort that includes a renewed emphasis on cars to meet expectations that fuel prices will continue to rise and spur demand.

Ford on Monday unveiled what executives call its most critical launch of 2010. Its Focus hatchback and sedan will be produced globally, including at a Michigan plant. Those cars will have 80 percent of their parts in common, a move that Ford says will reduce costs.

The Focus is part of Ford's global C-sized platform that it expects to underpin up to 10 vehicles and account for 2 million vehicles in annual production by 2012. Ford also is launching the Fiesta small car in North America this year.

Mulally said he could envision Ka, a car smaller than the Fiesta, being sold in the United States eventually as fuel prices rise and more people want to buy smaller vehicles, but declined to project a timing.

(Reporting by David Bailey and Ben Klayman. Editing by Robert MacMillan)