Automotive sales in the US have cooled since a burst of activity in May, but analysts say that the figures for 2004 will be encouraging.

Industry sales for June are expected to fall from the 17.8 million vehicles sold in May to just 16.5 million, but observers say that last month's figures were unusually strong as a result of major incentives.

With the economy strengthening, analysts say that overall annual sales will still be healthy, and have pinpointed the wider upward trend as the key movement of the automotive market.

David Littmann, chief economist with Comerica Bank, told Reuters that the market had been affected by some "wild swings", but sounded an optimistic note.

"The basics are there for good sales," Littmann said. "July will be excellent. I expect that to move back over 17 million units."

Automakers are set to report their monthly sales in the world's biggest automotive market on July 1.