General Motors Co said on Monday its U.S. auto sales fell 19.4 percent in July from a year earlier, but retail sales rose from the month before for a fifth consecutive month, supported by the U.S. government's Cash for Clunkers incentives.

GM, which emerged from bankruptcy last month after the sale of its best assets to a group led by the U.S. Treasury, said U.S. sales fell to 189,443 vehicles in July from 235,184 a year earlier. Retail sales were down only 9 percent from July 2008, but fleet sales were down 47 percent.

The result stands in contrast to a small 2.3 percent sales increase for rival Ford Motor Co, the only Detroit car maker not to pass through bankruptcy in 2009, and a 9 percent decline at Chrysler Group LLC, which emerged from bankruptcy in June.

GM cut production sharply during the 40-day bankruptcy process and said that in July it produced 102,000 vehicles in North America, down 57 percent from a year earlier.

The automaker also made its first projection of third-quarter production, a figure critical to suppliers. GM said it expects to produce 535,000 vehicles in the third quarter, down 42 percent from the quarter a year earlier.

GM said inventory at the end of July was trimmed by 38 percent from a year before to about 466,000 vehicles in stock, reflecting historically low levels. GM dealers had an average of 76 days' supply at the end of July.

Inventory included 202,000 cars and 264,000 trucks including crossovers, down about 20 percent from the end of June, GM said.

(Reporting by David Bailey, editing by Gerald E. McCormick)