SAO PAULO--Brazil auto production continued to decline from the year-earlier period as demand cools in Latin America's biggest economy, auto maker association Anfavea said Thursday. June auto output totaled 261,333 cars and light commercial vehicles, a 4% drop from the 2011 month. Including trucks and buses, output totaled 273,579 vehicles, a 7.6% drop on the year and a 2.6% retreat from May production. June is the third consecutive month that output has fallen below the previous year's levels. So far this year, production is lagging 2011 by 9.4%, Anfavea said. That drop in production has led a number of car makers to cut jobs at some of their factories. General Motors (GM), Volkswagen AG (VOW.XE) and Volvo have all announced job cuts as they shift production to adapt to the new demand outlook. At the end of June, however, employment in the industry continued to climb, expanding 1.3% from May and 2.9% on the year. Auto sales improved in June, but cumulatively the year is still lagging 2011 levels. The government slashed taxes and banks' reserve requirement on auto credit at the end of May as part of an effort to stimulate sales, and the move had a significant effect, with June sales of cars and light commercial vehicles reaching 340,611 units, a 19% jump from the 2011 month and a 24% advance from May. Including trucks and buses, sales reached 353,200 units, a 16% gain on the year and a 23% advance from May. June sales were the second-highest ever recorded in a month, losing only to sales in December 2010, Anfavea said. Still, through the end of June sales are 1.2% behind 2011 levels. Auto-dealer association Fenabrave on Tuesday slashed its estimates for sales this year, estimating that sales of cars, trucks buses and motorcycles will contract 1.5% this year. It previously expected an expansion of more than 3%. Auto exports, meanwhile, showed a slight improvement in June after slipping in May. Exports totaled $1.34 billion in the month, up 2% from the 2011 month. So far this year, exports are up 4.5% to $7.93 billion. Once again, Fiat SpA (F.MI) led car sales, with 63,530 vehicles sold. Volkswagen sold 62,418 cars, and General Motors came in third with 47,958 cars sold. Ford (F) rounded out the top four with 29,312 cars sold.