DETROIT, June 2: US auto sales steadied in May to show surprising strength in the face of high gas prices and a weak housing market, led by gains for industry leaders General Motors Corp. and Toyota Motor Corp. Ford Motor Co. posted a 10 percent sales drop as it pulled back from low-margin sales to rental agencies and failed to make up for the lost volume in its US showrooms.

With its seventh consecutive monthly sales decline, Ford also surrendered the No. 2 spot in the US market for the year-to-date to Toyota.

Across the industry, fuel-efficient passenger cars continued to outsell trucks. But analysts said the surprise was that overall sales were up slightly, especially after a weak April that had stoked fears of a deepening slump.

We thought auto sales may be weaker because of high gas prices, Global Insight analyst Rebecca Lindland said. We are very pleasantly surprised.

The consumer seems to be pretty resilient. Toyota shot past all its rivals with a 10 per cent sales gain, while GM also topped Wall Street expectations with a 5 per cent rise. Nissan Motor Co. sales grew 3 per cent.

Chrysler Group posted a sales rise of less than a per cent, capping a month in which it announced a deal to be acquired by Cerberus Capital Management from Germany's Daimler.

Apart from Ford, Honda was the only automaker to report lower sales with a 1.4 per cent decline. Together the top six automakers account for almost 85 per cent of the US market.

Percentage sales changes as reported were adjusted for an additional selling day last month compared to a year earlier -- a reporting style favored by GM, Toyota and others.

Industry-wide sales for May ticked up to 16.16 million units on a seasonally adjusted, annualized rate. ---Reuters