General Motors took the unusual step of urging investors to stop trading in its shares, warning them that the stock, currently trading “in excess of $1”, was likely to be worthless very soon.

As the car industry published figures, suggesting that the decline in sales was beginning to show signs of stabilising, GM, currently in bankruptcy proceedings, issued a public warning about its shares after noticing continued high trading volume in its common stock at prices of $1 or more.

"GM management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios," it said in a statement.

"Stockholders of a company in chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, GM management strongly believes all such claims will not be fully satisfied, leading to its conclusion that GM common stock will have no value."

The warning came as new sales figures suggest that deep discounts have helped temper the decline in US car sales after a year of sharp falls that have taken sales down to levels last seen in the 1980s.

Ford reported a drop in June sales of 10.7 per cent to 154,873 cars, calling this "steady progress". It was the company’s smallest monthly sales decline since July 2008 and follows a ten-month run of sales drops in excess of 20 per cent. The company, the only major US auto manufacturer to avoid bankruptcy protection and not receiving government loans, has seen its market share grow while rivals General Motors and Chrysler struggle.

GM reported that retail sales in June were up 10 per cent on May. Total sales of 176,571 were down 33.6 per cent compared with a year ago.

But GM’s fleet sales of 32,725 vehicles were down 49 per cent compared to a year ago, contributing to an overall sales decline of 89,366 vehicles compared to June 2008. This drop in fleet sales was a direct result of a strategic decision GM made to reduce production and encourage inventory sell-offs by dealerships. GM total truck sales in June of 93,458 were down 40 per cent, and car sales of 83,113 were off 24 per cent compared with a year ago.¶

Chrysler, in its first sales report following its sale to a group led by Italy's Fiat in June, said US June sales fell 42 per cent. Toyota, which trailed Ford for second place in the US market through the first half of 2009, posted a 31.9 per cent sales decline in June.

Analysts said that the figures may have been distorted by GM's bankruptcy filing and inventory sell-offs from Chrysler dealerships in early June. But new US government incentives to trade low mileage vehicles for new cars, known as the "cash for clunkers" programme could help sales further in future months. Standard & Poor's last week said the scheme could help increase US sales by 250,000 vehicles in 2009.

GM, meanwhile, returned to a bankruptcy court in New York today to seek approval of its plan to restructure and create a "new GM". Harry Wilson, a member of the auto team that is helping GM, told Judge Robert Gerber’s court that the government has set a July 10 deadline for the restructuring plan to be completed. The court heard objections from bondholders, who have been left out of the bankruptcy process.

Mr Wilson suggested that the government, which is set to become the majority owner of the new GM, is considering an initial public offering of the company’s shares in 2010.

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